The average rate this week is getting close to that level
of ConsumerAffairs
Maybe its just a coincidence, but the week the Federal Reserve cut its key interest rate for the first time in four years, mortgage rates tumbled. Freddie Macs Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.09% this week, the lowest level since 2022.
Mortgage rates continued declining towards the 6% mark, reviving purchase and refinance demand for many consumers, said Sam Khater, Freddie Macs chief economist.
While mortgage rates do not directly follow moves by the Federal Reserve, this first cut in over four years will have an impact on the housing market. Declining mortgage rates over the last several weeks indicate this cut was mostly baked in, but we expect rates to fall further, sparking more housing activity.
Mortgage rates are generally keyed to the yield on the Treasurys 10-year bond. Bond yields fell in anticipation of the Feds rate cut. On Thursday the yield had dropped to 3.749%.
Lower mortgage rates could give the housing market a much-needed shot in the arm. The National Association of Realtors (NAR) reports sales of existing homes continue to fall, and were down another 2.5% in August.
However, sluggish sales are not bringing down prices. NAR reports the median existing-home sales price rose 3.1% from August 2023 to $416,700, the 14th consecutive month of year-over-year price increases.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-09-19 17:29:38
