The Numbers
In the past week, mortgage rates have declined as economic data in the U.S. suggests a slowdown in inflation. This has allowed bond yields to make a slight decrease. According to data released by Freddie Mac on Thursday, the 30-year fixed-rate mortgage stood at an average of 6.78% as of July 20. This rate decreased by 18 basis points from the previous week, where it was at 6.96%. It’s worth noting that the rate reached its highest level since November 2022. Comparatively, last year, the average for the 30-year mortgage was 5.54%.
Alongside this trend, the average rate on the 15-year mortgage also saw a decline. It dropped from 6.3% the previous week to 6.06%. A year ago, the 15-year mortgage had an average rate of 4.75%.
Additional data from Mortgage News Daily stated that the 30-year fixed-rate mortgage averaged at 6.9% as of Thursday afternoon.
Insights from Freddie Mac and Experts
Despite the drop in rates, Sam Khater (chief economist at Freddie Mac) stated in a release that “the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates.”
Lisa Sturtevant (chief economist at Bright MLS) shared her perspective, saying, “It is not likely we will see mortgage rates below 6% before the end of 2023. But rates should come down from where they have been this summer which is welcome news for home buyers. The question is whether they will fall enough to entice sellers into the market who will have to give up the super low mortgage rate they secured during the pandemic.”
Overall, while mortgage rates have fallen recently, challenges remain for potential homebuyers due to the shortage of available homes for sale. The hope is that rates will continue to decrease, creating opportunities for both buyers and sellers in the market.
