While they remain historically high, mortgage rates in the United States have fallen to the lowest level in months.
According to Freddie Mac’s latest Primary Mortgage Market Survey, the average 30-year fixed mortgage rate in the country dropped 0.06 percentage points from last week to 6.5%. This marks the lowest reading since October 17, 2024, offering American borrowers some relief amid still lofty rates.
“Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike,” said Sam Khater, Freddie Mac’s chief economist, per Fox Business.
“As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding. In fact, the share of market mortgage applications that were for a refinance reached nearly 47%, the highest since October.”
The 15-year fixed mortgage rate also lowered during the period, dropping to 5.6% from last week’s 5.69%.
As of August, only 28% of homes on the market are currently “affordable” for a typical American household, with the highest “affordable” home price for a median-income household sitting at $298,000. In contrast, that figure was $325,000 in 2019, despite the median income having risen by 15.7%.
“Even as incomes grow, higher interest rates have eroded the real-world purchasing power of the typical American household,” said Danielle Hale, Chief Economist at Realtor.com.
As a result, says Hale, “this dynamic is forcing many buyers to adjust their expectations, whether that means looking for smaller homes, moving farther out or delaying the dream of homeownership altogether.”
Early last month, The Dallas Express reported that housing prices are seeing substantially different trends depending on the region of the country. While they have been rising in the Northeast and Midwest, in the South, particularly in Texas and Florida, prices have actually been falling.