Mortgage rates fall as U.S. inflation slows

The numbers: Mortgage rates fell in the past week as U.S. economic data indicated inflation was slowing allowing bond yields to fall slightly.

The 30-year fixed-rate mortgage averaged 6.78% as of July 20, according to data released by Freddie Mac
FMCC,
+2.87%
on Thursday. The rate was down 18 basis points from the previous week — one basis point is equal to one hundredth of a percentage point.

Last week the 30-year was at 6.96% — the highest level since November 2022. Last year, the 30-year was averaging at 5.54%

The average rate on the 15-year mortgage fell to 6.06% from 6.3% last week. The 15-year was at 4.75% a year ago.

Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.

Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 6.9% as of Thursday afternoon.

What Freddie Mac said: Despite a drop in rates, “the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates,” Sam Khater, chief economist at Freddie Mac, said in a statement.

What are they saying? “It is not likely we will see mortgage rates below 6% before the end of 2023,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement.

“But rates should come down from where they have been this summer which is welcome news for home buyers,” she added. “The question is whether they will fall enough to entice sellers into the market who will have to give up the super low mortgage rate they secured during the pandemic.”

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