Mortgage rates in the U.S. dropped to their lowest level of the year this week, mortgage finance agency Freddie Mac announced Thursday.
According to the latest Primary Mortgage Market Survey, the average rate for a 30-year fixed-rate mortgage fell to 6.58%, down from 6.63% last week. One year ago, the 30-year rate was 6.49%. The average rate on a 15-year fixed-rate mortgage also decreased to 5.71% from 5.75% a week prior. The 15-year rate was 5.66% at the same time last year.
“Mortgage rates fell to their lowest level since October,” said Sam Khater, Freddie Mac’s chief economist. “Purchase application activity is improving as borrowers take advantage of the decline in mortgage rates.”
This modest relief comes amid a severe housing affordability crisis. A report from Harvard University’s Joint Center for Housing Studies indicates that high home prices and elevated interest rates have driven homebuying activity to its lowest point since the mid-1990s.
The report also highlights that rising insurance premiums, property taxes, and exorbitant rents are compounding the issue, leaving more households “cost-burdened” and contributing to a sharp rise in homelessness.
The crisis has captured the attention of top government officials. Treasury Secretary Scott Bessent said Thursday that addressing housing affordability is a primary focus. “We are really going to work on this housing affordability crisis. That’s one of my big projects for the fall,” Bessent stated in an interview.
While the summer is typically the peak homebuying season, Realtor.com senior economist Joel Berner described recent activity for both new and existing homes as “sluggish.” He suggested that while the recent rate drop has encouraged some sidelined buyers, a more substantial change may be necessary to fully reinvigorate the market.
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