Mortgage rate averages are hovering near 12-month lows, and economists expect they’ll ease in the coming weeks, according to the latest data from Freddie Mac.
The 30-year, fixed-rate mortgage averaged 6.49% as of Aug.15, slightly higher than its previous average of 6.47%, but still lower than the comparable week this time last year when it stood at 7.09%, the mortgage giant said Thursday.
Similarly, the 15-year, fixed-rate mortgage edged up, averaging 5.66%. That’s higher than last week when it stood at 5.63%, but lower than a year earlier when it was 6.46%.
Though the increase breaks the weekslong streak of average rate declines, the data is still good news for the housing market, according to Sam Khater, Freddie Mac’s chief economist.
“While rates increased slightly this week, they remain more than half a percent lower than the same time last year,” Khater said in a statement. “In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
Daily mortgage rates also moved slightly higher Thursday, with the 30-year rate climbing to 6.58% and the 15-year rate reaching 6.15%, according to Mortgage News Daily.
The update in mortgage rates comes a day after the Bureau of Labor Statistics released the latest inflation numbers that showed cooling price growth and met market expectations. That’s good news, and it’s the latest indicator that the Federal Reserve will cut interest rates next month. But, because the data was expected, its effect on mortgage rates was muted, according to Matthew Graham, chief operating officer of Mortgage News Daily.
“Some reports are more relevant than others when it comes to their potential rate impact and today's Consumer Price Index (CPI) has frequently caused the biggest swings on any given month,” Graham wrote in a post Wednesday. “August will not be one of those months as today's installment was right in line with the market's expectations, resulting in exceptionally tame market/rate movement (for a CPI day anyway).”
Still though, mortgage rates are lower than they were this spring, and industry professionals expect that an interest rate cut from the Fed will instantly provide relief for the mortgage market.
“With inflation falling below 3 percent for the first time since 2021, the Fed is sure to cut interest rates,” Denise McManus, an advisor at Engel & Volkers, said in a survey from personal finance website Bankrate. “This is the target the Fed has been waiting for. I predict rates will go down.”