The average interest rate on a 30-year mortgage in the US has fallen to 6.58%, the lowest it has been in almost 10 months, according to Freddie Mac. This drop from last week’s 6.63% rate could give potential homebuyers more purchasing power in a slow housing market. A year ago, the rate was 6.49%.
For 15-year fixed-rate mortgages, often chosen by people refinancing their loans, the average rate also went down — from 5.75% last week to 5.71% this week.
Experts say this decline is mainly due to recent economic data and market expectations. Joel Berner, a senior economist at Realtor.com, said that while lower rates might encourage more buyers, it’s not certain if this drop will be enough to get many back into the housing market.
Mortgage activity is picking up:
- Mortgage applications rose 10.9% last week.
- Refinancing made up 47% of all applications and surged 23% compared to the week before — the biggest jump since April.
- Applications for adjustable-rate mortgages (ARMs) increased 25%, the highest since 2022.
This marks the fourth week in a row that mortgage rates have gone down. The last time they were this low was on October 24, when the average rate was 6.54%.
Mortgage rates are linked to the 10-year US Treasury yield, which was at 4.29% on Thursday afternoon, slightly higher than Wednesday’s 4.24%.
The drop in rates follows weaker-than-expected US job numbers for July. This has led to speculation that the Federal Reserve may cut short-term interest rates next month. A rate cut could help boost jobs and the economy but might also raise inflation, especially with added costs from tariffs under President Trump’s policies.
Most economists believe 30-year mortgage rates will stay above 6% this year, though some forecasts from Realtor.com and Fannie Mae suggest they could fall to around 6.4% by the end of the year.
