Mortgage Rates Fall to Lowest Level in 15 Months

New York, NY, August 9, 2024-Mortgage rates fell to the lowest level in more than a year, raising hopes for relief in the battered U.S. housing market, according to the Wall Street Journal.

“The average rate on the standard 30-year fixed mortgage fell around a quarter percentage point to 6.47%, according to a survey of lenders released Thursday by mortgage-finance giant Freddie Mac, a low not seen since May 2023 and the sharpest weekly decline in around nine months. 

“If sustained, lower mortgage rates could help shepherd some Americans back into a market that they have been priced out of in recent years. Home sales last year fell to their lowest level in nearly three decades, and they have been similarly sluggish in 2024. 

“Mortgage rates have roughly doubled since the Federal Reserve began its campaign to curb inflation in early 2022, which has dramatically pushed up the monthly cost to borrow for a home.

Inventory of homes for sale has been rising but it remains well below historic averages, which could keep a damper on sales activity unless supply picks up. But the past week’s big drop is raising hopes that it could spur more buyer interest. 

“‘Mortgage-rate relief is arriving quicker than many expected,’ said Ralph McLaughlin, senior economist at Realtor.com. (News Corp, parent of The Wall Street Journal, operates Realtor.com.)

“Mortgage rates aren’t directly tied to the Fed’s moves. But they tend to loosely follow the yield on the benchmark ten-year Treasury note, which rises and falls based on expectations for the economy. Yields have fallen this month amid fears about a slowdown in the U.S. that sparked a global market selloff. Investors have also ramped up bets that the Fed will cut interest rates, starting next month. Some are betting that the Fed will reduce rates by as much as half a percentage point.”