U.S. Mortgage Rates Decline
WASHINGTON (Reuters) – U.S. mortgage rates dropped this week as expectations mount that the Federal Reserve will begin cutting interest rates next Wednesday. However, this decrease may not immediately boost the housing market due to persistently high home prices.
The average rate on the popular 30-year fixed-rate mortgage fell to 6.20%, the lowest since February 2023, down from 6.35% last week, according to mortgage finance agency Freddie Mac. This is a notable decrease from the 7.18% average during the same period last year.
Additionally, the average rate on the 15-year fixed-rate mortgage declined to 5.27% from 5.47% last week, compared to 6.51% a year ago. The U.S. central bank is expected to initiate its easing cycle with a 25 basis points rate cut next week.
Despite the improved mortgage rate environment, prospective buyers remain hesitant due to a combination of high house prices and ongoing supply shortages, according to Sam Khater, Freddie Mac’s chief economist.
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