Mortgage rates rose slightly from the previous week as investors continued to expect the Federal Reserve to cut interest rates next month.
The average interest rate on a 30-year fixed mortgage rose to 6.49% from 6.47% last week, Freddie Mac Report The interest rate on a 30-year fixed mortgage fell to its lowest level in more than a year. A year ago, the average interest rate on a 30-year fixed mortgage was 7.09%.
Separately, the average interest rate on a 15-year fixed mortgage was 5.66%, up from 5.63% the week before. The interest rate on a 15-year loan was 6.46% a year ago.
“While prices are up slightly this week, they remain about half a percent lower than the same time last year,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“In 2023, the 30-year fixed mortgage rate was around 8%, which put a damper on the housing market. Now, the 30-year fixed rate is hovering around 6.5% and is likely to trend lower in the coming months as inflation continues to slow. Lower interest rates are good news for potential buyers and sellers alike.”
Despite the rise in prices this week, the recent downward trend in prices has spurred some activity in the market. Home purchase applications increased 3% from the previous week, but are still 8% lower than the same week last year, according to data from the U.S. Census Bureau. The Mortgage Bankers Association (MBA) released Wednesday.
Meanwhile, homeowners are taking the opportunity to restructure their existing loans.
Home loan refinance applications rose 35% from the previous week and were 118% higher than the same week last year, according to the business association, the strongest weekly gain since May 2022.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”