- Mortgage rates seen as “relatively stable” after rapid rise.
- Applications for mortgages up nationwide.
- Homebuyers encouraged to consider rate locks.
Mortgage rates just slid slightly down after climbing for weeks.
The weekly average rate for a 30-year fixed-rate mortgage in the U.S. dropped to 6.67% as of Thursday, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.
A week ago, that average had reached 6.69%, the highest rate in more than a year.
The daily index rate for the same type of loan calculated by Mortgage News Daily was also down Thursday, dipping to 6.69% as of midday, a decline of 0.11 percentage points to what is now the lowest rate in three weeks. The daily index began the week at 6.8%.
Mortgage rates were described as remaining “relatively stable” in a post on the Freddie Mac site.
“Housing affordability has improved from a year ago, and recent increases in purchase and refinance applications suggest that borrowers continue to respond to even modest changes in mortgage rates,” the post stated.
Wednesday, mortgage applications in the U.S. were up 3.6% from a week earlier on a seasonally adjusted basis, the Mortgage Bankers Association reported, a shift sparked by the rate reprieve.
“After five consecutive weeks of increases, mortgage rates declined slightly last week as oil prices dipped briefly on the hopes of a sustained resolution to the war in Iran,” said Joel Kan, the association’s vice president and deputy chief economist.
The 30-year fixed rate may be down “but remained close to its highest level in a year,” Kan said, adding that while both purchase and refinancing applications are up, the pace “has fallen below last year’s pace in recent weeks.”
Jeremy Holmgren, Zions Bank Mortgage senior vice president, appreciated the shift.
“The encouraging development right now is that mortgage rates have stopped moving sharply higher,” Holmgren told the Deseret News. “This is helpful for both buyers and homeowners looking to refinance.”
Rates are improving, he said, as drivers like inflation, U.S. Treasury bond yields and Federal Reserve policy expectations are slowing and softening. But those can change quickly, especially as the war launched against Iran by the U.S. and Israel earlier this year drags on.
“Rates will continue to be influenced by economic factors, so it’s important for buyers to consider things like a rate lock,” Holmgren said. “This stability also helps bring some buyers who have been sitting on the sidelines back into the conversation.”
Home sales have been dragging nationwide, falling in July to the lowest level in nearly two years on a seasonally adjusted basis, a slowdown blamed on high costs, including mortgage rates, as well as economic uncertainty. Fewer home sales also closed in Salt Lake County last month than in June.