Housing News

Mortgage Rates Dip Slightly as Purchase Applications Tick Up

Mortgage interest rates dipped slightly on Thursday after two consecutive weeks of increases.

The average rate ticked down to 6.74% for 30-year, fixed-rate loans in the week ending July 24, according to Freddie Mac data. That was a slight decrease from 6.75% the week prior.

For comparison, rates averaged 6.78% during the same period in 2024.

“This week, the 30-year fixed-rate mortgage essentially remained flat” Freddie Mac Chief Economist Sam Khater said in a statement. “Overall, the backdrop for the housing market is positive as the economy continues to perform well with solid employment and income growth.”

Indeed, mortgage applications inched up 0.8% for the week ending July 18, following three straight weeks of increases, according to the Mortgage Bankers Association.

This suggests that even a modest drop in interest rates may provide a bit more breathing room in today’s affordability strained housing market.

And while a one-basis-point drop might seem negligible, it still nudges the needle. On a $400,000 home with 20% down, the move from 6.75% to 6.74% results in approximately $766 in savings over the life of a 30-year loan.

The rate shift comes on the heels of June inflation data, which showed consumer prices rising to a four-month high—an uptick that briefly pushed rates higher last week.

If inflation remains higher than the U.S. Federal Reserve would prefer, it is less likely to lower interest rates. Though mortgage rates aren’t directly tied to the Fed’s benchmark interest rate, they tend to follow its cues.

In a market where every dollar matters, it remains to be seen whether a small rate drop can signal a larger change in housing momentum.

“There is growing evidence that sluggish housing market activity is about more than just rates, or even affordability,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. The multiple listing service covers the mid-Atlantic region.

“Compared to a year ago, fewer buyers are holding back because of high mortgage rates,” added Sturtevant. “A growing share cited other financial issues and general economic uncertainty as the reasons they are not buying this year.”

However, there is some good news for buyers, in addition to the dip in rates.

According to Realtor.com’s June Housing Report, the national median list price held steady at $440,950, but price cuts were reported on 20.7% of listings.

“While 6% might seem to be a magic number for the housing market, there are a lot of other factors that are driving homebuying and selling decisions in this shifting market,” said Sturtevant.