Interest rates on popular U.S. mortgages fell to a 15-month low last week after the Federal Reserve signaled it could begin cutting its policy rate in September and a shift to the downside in the labor market reinforced financial market bets that borrowing cost cuts would be significant.
The Mortgage Bankers Association reported Wednesday that the average rate on 30-year fixed-rate mortgages fell 27 basis points in the week ending Aug. 2 to 6.55 percent. That’s the lowest rate since May 2023 and the biggest drop in two years.
The decline offers homebuyers long-awaited relief in what has become an increasingly unaffordable housing market in recent years as both home prices and borrowing costs have risen.
The difficulty was highlighted Wednesday in the July housing confidence index from Fannie Mae, the government-backed mortgage finance company. Only 17 percent of respondents said it was a good time to buy a home, down from 19 percent in June, according to Fannie Mae data.
Additionally, 35 percent said they would rent their next home rather than buy it, the highest proportion since 2011.
“At this point, it’s difficult to say whether this reflects simple buyer fatigue or a growing sense of disenchantment with the market, but we believe it could have important implications should the trend continue,” Doug Duncan, Fannie Mae’s chief economist, said in a statement.
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– 2024-08-18 03:11:15
