Introduction
U.S. mortgage rates have experienced a decline for the first time in six weeks. This decrease can be attributed to the uncertainty surrounding the U.S. Federal Reserve’s decision on interest rates in their upcoming meeting in September.
30-Year Fixed-Rate Mortgage
As of August 31, the average rate for a 30-year fixed-rate mortgage stands at 7.18%, according to data released by Freddie Mac. This figure reflects a reduction of 5 basis points from the previous week. It is important to note that one basis point represents one hundredth of a percentage point. A year ago, the average rate for a 30-year mortgage was 5.66%.
15-Year Mortgage
The average rate for a 15-year mortgage remains unchanged from the previous week at 6.55%. In comparison, a year ago, the 15-year mortgage averaged at 4.98%.
Insights from Freddie Mac
Freddie Mac’s weekly report on mortgage rates is based on an extensive collection of lender applications received from across the country. This data assists Freddie Mac in evaluating and analyzing mortgage trends. Sam Khater, chief economist at Freddie Mac, mentions that recent market volatility adds uncertainty to rate predictions. A more accurate forecast is expected in September when the Federal Reserve makes decisions regarding interest rate hikes.
Expert Opinions
Lisa Sturtevant, chief economist at Bright MLS, believes that while the desire for homeownership remains strong, the rising rates above 7% are deterring prospective buyers from taking action. The numbers no longer align favorably for a significant portion of these buyers.
In conclusion, amidst the uncertainty surrounding interest rate hikes, there has been a notable decline in U.S. mortgage rates. The impact of this decrease on the housing market and homebuyers’ decisions remains to be seen as September approaches and the Federal Reserve determines its next steps.
