Interest rates for mortgages reach their lowest point since February 2023.
The typical 30-year fixed-rate mortgage sits at 6.2% as per Freddie Mac's statement on September 12th. This is a decrease from the previous week's 6.35% and significantly lower than the 2-decade high of 7.79% recorded in October 2023.
The downward trend in mortgage rates began in early August prompted by rumors of reduced interest rates, particularly following a less robust than expected employment report for July. Since then, the rates have been slowly declining.
"Mortgage rates have dipped by more than half a percentage point in the past six weeks, hitting their lowest point since February 2023," expressed Sam Khater, Freddie Mac's chief economist, in a press release. "The rates are continuing to decrease due to the more subdued economic data we're seeing. However, potential home buyers are still hesitant, as they balance out high house prices and persistent housing supply shortages."
Data indicating decreasing inflation and a weakening workforce have laid the foundation for the Federal Reserve to implement its first interest rate reduction since 2020. This reduction is set to take place at the Federal Reserve's upcoming meeting next week.
While the Federal Reserve doesn't control mortgage rates directly, their actions can impact them through adjustments in bond yields. The 10-year US Treasury yield, which is influenced by the Fed's interest rate decisions, has plummeted in recent weeks. This is due to information suggesting that price pressures are decreasing and the labor market is not intensifying as rapidly as anticipated.
This situation is still developing and will be updated.
The decrease in mortgage rates has been beneficial for some businesses, as it allows them to secure lower loan costs for their operations. The overall health of the economy relies on several factors, and the current trend in mortgage rates is one of them.
