Accodring to the SFGATE, the average rate on a 30-year mortgage has dropped to its lowest point since October, giving buyers a much-needed boost in affordability. According to Freddie Mac, the average long-term rate declined to 6.58%, down from 6.63% last week.
This marks the fourth consecutive week of declines, offering renewed opportunities for both buyers and current homeowners considering refinancing.
15-Year Mortgage Rates Also Slide
Shorter-term loans saw improvements as well. The average rate on a 15-year fixed mortgage—popular among homeowners refinancing—fell to 5.71% from 5.75% last week. A year ago, it stood at 5.66%, showing how steady this loan option has remained despite market shifts.
Why Rates Are Moving Lower
Mortgage rates are shaped by many factors, including the Federal Reserve’s decisions, inflation data, and bond market activity. Right now, lower Treasury yields and speculation about a possible Fed rate cut are creating conditions for easing borrowing costs.
While inflation remains a key factor to watch, recent economic reports suggest momentum is shifting in a direction that benefits homebuyers.
Market Outlook: What Experts Expect
Economists anticipate mortgage rates will remain above 6% this year, with Realtor.com and Fannie Mae forecasting an average of around 6.4% by year-end. Though not a dramatic drop, this trend could help stabilize affordability, especially as home price growth has slowed in many regions.
For buyers, more listings and competitive pricing in areas such as the Sunbelt and the West could provide additional opportunities.
Refinancing on the Rise
The recent dip has already encouraged many homeowners to act. Mortgage applications rose 10.9% last week, with refinancing applications jumping 23%—the strongest pace since April. Nearly half of all mortgage applications now involve refinancing, as homeowners look to lock in better rates or tap into equity.
Applications for adjustable-rate mortgages also climbed to their highest level since 2022, highlighting the growing momentum in the lending market.
What This Means for Buyers and Homeowners
While affordability challenges remain, the steady decline in rates provides a window of opportunity. Buyers who had stepped aside due to higher financing costs may now find it worthwhile to re-enter the market. For current homeowners, refinancing could be a strategic way to lower monthly payments or access equity.
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Source: sfgate.com
