Mortgage Rates Dip to One-Year Low, Boosting Homebuyer Sentiment
Washington D.C. – Mortgage rates have fallen to their lowest level in a year, with the average 30-year fixed rate now at 6.19%, according to Freddie Mac. The decline is fueled by expectations of a potential interest rate cut by the Federal Reserve and emerging signs of a cooling economy.
Economists anticipate mortgage rates will likely remain within the 6%-7% range through 2026, despite the possibility of further modest decreases. Kara Ng, senior economist at zillow Home Loans, noted markets currently see an October rate cut by the Federal Reserve as “near certain.” She added,”With signs of softer economic momentum and a deteriorating labor market,mortgage rates may drift slightly lower through 2026,” but cautioned that Zillow still expects rates to stay within the recent 6%-7% band.
The Federal Reserve’s actions, while not directly setting mortgage rates, influence them through the 10-year Treasury yield, impacting overall borrowing costs.
This drop in rates is coinciding with improved home affordability. In September, the typical home sold for 1.4% below the asking price – the largest September discount since 2019, according to Redfin. Consequently, existing home sales rose at their fastest pace in seven months, according to the National Association of Realtors (NAR).
“As anticipated, falling mortgage rates are lifting home sales,” stated Lawrence Yun, NAR’s chief economist. “Improving housing affordability is also contributing to the increase in sales.”
Frequently Asked Questions:
What is the current average mortgage rate in the US?
The average 30-year fixed mortgage rate is 6.19%, according to Freddie Mac.
Why did mortgage rates drop this week?
Rates fell due to expectations of a Federal Reserve rate cut and indications of a slowing economy.
