Mortgage rates in the United States have dropped for the second week in a row, reaching their lowest level since October.
Freddie Mac reports that the average 30-year fixed-rate mortgage is now 6.69%, down from last week. This decline has renewed interest among homebuyers, showing how even small rate changes can impact the market.
Sam Khater, chief economist at Freddie Mac, noted, “This week, mortgage rates decreased to their lowest level in over a month. Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved.”
This reaction reflects the ongoing affordability challenges faced by many, as even slight rate adjustments lead to noticeable responses from buyers.
Despite the encouraging decline in rates, many prospective homebuyers are still waiting for further reductions.
Approximately 80% of mortgage holders currently have a rate below 5%, according to a Zillow survey earlier this year. This dynamic creates hesitancy among sellers, as many are reluctant to trade their existing low-rate mortgages for higher-rate ones.
The reduction extends beyond 30-year mortgages.
The average rate for a 15-year fixed mortgage also dropped, reaching 5.96% compared to 6.10% last week. This represents a notable improvement compared to one year ago when the 15-year fixed rate averaged 6.29%.
As buyers and sellers respond to these changes, the real estate market continues to grapple with affordability and uncertainty, as even slight rate adjustments significantly impact buyer behavior.