Mortgage rates in the United States ticked down for the first time in a month, according to Freddie Mac’s Primary Mortgage Market Survey. The benchmark 30-year fixed-rate mortgage averaged 6.09% as of Thursday, a decline from last week’s 6.11%.
The easing in the 30-year rate also represents a meaningful improvement from the 6.87% observed at the same point last year. Shorter-term mortgage products moved lower as well: the 15-year fixed-rate mortgage fell to an average of 5.44% from 5.50% a week earlier, and is substantially below the 6.09% level recorded one year prior.
Freddie Mac’s chief economist, Sam Khater, emphasized the combination of factors supporting the shift. "Bolstered by strong economic growth, a solid labor market and mortgage rates at three-year lows, housing affordability continues to measurably improve," he said. "These factors have caught the attention of many prospective homebuyers, driving purchase application activity higher than a year ago." The comment links the rate movements to stronger buyer interest, according to Freddie Mac.
Despite the recent decline in rates and the signs of improved affordability, the U.S. housing market remains challenged by an imbalance between buyers and sellers. Home prices are still high for many would-be purchasers, and homeowners who currently hold mortgages with lower interest rates have little incentive to list their properties for sale. That reluctance among existing owners contributes to constrained supply and continues to shape market dynamics.
Freddie Mac’s survey data reflect conventional, conforming, fully amortizing home purchase loans for borrowers making 20% down payments and with strong credit profiles. As such, the reported averages are specific to that segment of the mortgage market and may not reflect rates available to borrowers with different loan types, down payments, or credit characteristics.
Lower quoted averages for the 30-year and 15-year fixed-rate products can ease monthly payment burdens for new buyers eligible for conventional loans with substantial down payments and excellent credit. However, the broader impact on transaction volumes and price trends will depend on whether inventory constraints ease and whether more current homeowners decide to sell despite their lower-rate mortgages.
Summary
The 30-year fixed mortgage rate fell to 6.09% from 6.11% week over week, and is down from 6.87% a year ago. The 15-year rate dropped to 5.44% from 5.50% the prior week and from 6.09% a year earlier. Freddie Mac attributes improving affordability to solid economic growth, a strong labor market, and the lower rates, which appear to be prompting increased purchase application activity versus a year ago.
Key points
- 30-year fixed-rate mortgage averaged 6.09% as of Thursday, down from 6.11% last week and 6.87% a year ago.
- 15-year fixed-rate mortgage averaged 5.44%, down from 5.50% last week and below 6.09% a year earlier.
- Sectors impacted include housing markets, mortgage lending, and household borrowing costs; movements in rates can influence purchase application volumes and affordability for new buyers.
Risks and uncertainties
- Elevated home prices - High asking prices remain a barrier for many prospective buyers, potentially limiting the reach of the improved rates.
- Seller reluctance - Current homeowners holding lower-rate mortgages may be unwilling to list, sustaining low inventory and constraining transaction activity.
- Survey scope - Freddie Mac’s averages cover conventional, conforming loans with 20% down payments and excellent credit, so the reported rates may not apply to borrowers outside that profile.