Mortgage rates in the U.S. have recently hit a 15-month low, with the average interest rate for a fixed 30-year mortgage now at 6.47%, as reported by Freddie Mac.
This decline in rates coincides with the anticipated interest rate cut by the Federal Reserve in September.
Related: Record High Mortgage Rates in the U.S. Crush Homebuyer Dreams
“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing,” revealed Freddie Mac’s Chief Economist Sam Khater in a company release. He also mentioned that the lower rates provide an opportunity for certain homeowners to refinance their mortgages.
The volatile week on Wall Street, prompted by the June jobs report and other economic indicators, has heightened fears of a looming recession among investors and homeowners alike.
Meanwhile, the expected rate cut by the Fed in September has caused yields for 10-year treasuries to drop, subsequently leading to a plunge in mortgage rates.
In September 2023, mortgage rates hit a record high of 7.49%.
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Despite the current low rates, the real estate market remains unpredictable, as soaring home prices continue to be unattainable for many buyers. Some experts speculate that potential interest rate cuts could drive home prices even higher in the near future.
“If rates go down just another percentage point — that’s what I’m hoping for by year-end — prices are going to go through the roof,” stated real estate expert Barbara Corcoran to Fox Business in March. “If you wait for interest rates to come down another point, I don’t think you’ll gain, I think you’ll wind up paying more.”
