Falling to its lowest level since May 2023, the average 30-year-fixed mortgage rate fell again this week to 6.35%, down from last week’s 6.46%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac, released Thursday.
This week’s numbers:
- The 30-year FRM averaged 6.35% as of August 29, 2024, down from last week when it averaged 6.46%. A year ago at this time, the 30-year FRM averaged 7.18%.
- The 15-year FRM averaged 5.51%, down from last week when it averaged 5.62%. A year ago at this time, the 15-year FRM averaged 6.55%.
What the experts are saying:
“Mortgage rates fell again this week due to expectations of a Fed rate cut,” said Sam Khater, Freddie Mac’s chief economist. “Rates are expected to continue their decline and while potential homebuyers are watching closely, a rebound in purchase activity remains elusive until we see further declines.”
Realtor.com Senior Economist Ralph McLaughlin stated:
“The Freddie Mac rate for a 30-year mortgage declined by 0.11 percentage points to 6.35% this week, the lowest level since May 2023, as 10-year Treasury yields stabilized around the 3.8% range since the prior week’s survey. This is due to an all-but-guaranteed rate cut next month.
“What’s more, not only has the market already priced in a 25 basis point cut at the Fed’s September meeting, but also 25 basis point cuts each in the November and December meetings. As such, we shouldn’t expect the downward movement in mortgage rates to accelerate unless worse-than-expected economic indicators suggest the market is headed for anything but a soft landing.
“Last week in Jackson Hole, Chairman Powell made it very clear that the FOMC now sees that it is time for a shift in monetary policy. They believe the battle against inflation is coming to an end, and that their primary concern in the road ahead will be maintaining a healthy labor market. Powell did acknowledge that the FOMC will continue to use incoming data points on inflation and the labor market to sharpen their pencils on when, and how deep, rate cuts will be. However, we do expect more stability in rates throughout the rest of the year.”
Bright MLS Chief Economist Lisa Sturtevant stated: “Declining rates are good for both buyers and sellers and should lead to an increase in housing market activity this fall.
“Lower mortgage rates make it more affordable for buyers to purchase a home. But lower rates also make it easier for existing homeowners to sell. Nationwide, there is an average three percentage point gap between rates on new and existing mortgages. This rate gap has kept some homeowners from listing their home for sale. As rates fall, the rate gap is going to be less of an obstacle to sellers.
“Inventory has already started increasing and new listing activity should continue to grow this fall. The housing market will begin to move toward balance; however, buyers will still find the market competitive. Mortgage rates will be lower than they were earlier this year, likely declining to between 6.2 and 6.4% by the fourth quarter.”
