30-Year Fixed Mortgage

Mortgage rates slipped to their lowest level in more than a month, but the bigger story is that the recent move lower may not be smooth. Freddie Mac said the average 30-year fixed mortgage fell to 6.47% this week, down from 6.52% last week. The drop offers some relief for buyers, yet the market is still being shaped by inflation concerns, Treasury yields and geopolitics. Freddie Mac’s chief economist, Sam Khater, said incoming data shows “a resilient consumer” and noted that retail sales and pending home sales are improving. Rates Move Lower, But Stay Above Last Year’s Level The average rate on a 30-year fixed mortgage was 6.81% a year ago, according to Freddie Mac’s Primary Mortgage Market Survey. The average 15-year fixed mortgage also eased, falling to 5.81% from 5.84% last week. For buyers and homeowners watching borrowing costs, the latest move is a sign that rates are drifting down, even if they remain elevated compared with a year ago. Fed Policy And Treasury Yields Still Matter Mortgage rates do not track the Federal Reserve’s benchmark rate directly, but they often move with the 10-year Treasury yield. That yield hovered around 4.45% as of Friday afternoon, helping keep mortgage costs from falling more sharply. The Federal Open Market Committee voted 12-0 to leave the federal funds rate unchanged at 3.5% to 3.75%, after earlier rate cuts in September, October and December and subsequent holds in January, March and April. Geopolitics Added Pressure Before The Latest Dip Rates have been elevated in recent weeks as concern over the Iran war weighed on markets. On June 17, President Donald Trump signed a memorandum of understanding while attending meetings in France, while Iran signed remotely. According to the description provided, the temporary framework calls for an immediate cessation of hostilities, reopening of the Strait of Hormuz, limits on Iran’s enriched uranium stockpile and a 60-day window to negotiate a permanent agreement. Why The Next Move Is Still Unclear Realtor.com senior economist Anthony Smith said the latest rounds have looked more promising than earlier periods of reprieve, but he also warned that markets may keep demanding a premium in the near term. He said the absence of clear guidance can limit how quickly mortgage rates fall, even if the ceasefire helps. Freddie Mac’s update suggests buyers are getting some help from lower borrowing costs, but the path ahead will likely depend on inflation, Treasury movement and whether the fragile geopolitical backdrop continues to ease. Read more at: www.foxbusiness.com

Mortgage Rates Ease to 6.47%, But Fed Caution Could Slow the Drop