Housing News

Mortgage Rates Fall to Four-Week Low

Homebuyers and homeowners are getting a little bit of good news this week, as mortgage rates dropped for the third week in a row.

Mortgage rates averaged 6.81% for 30-year, fixed-rate loans in the week ending June 18, according to Freddie Mac data. That was the lowest rates have been in four weeks.

Rates were down three basis points from where they were last week when they checked in at 6.84%. It’s also down from the same time last year when it was 6.87%.

Industry observers suggested the recent drop in mortgage rates could have a positive impact on the housing market, especially for those who are looking to buy or sell a home.

Additionally, the number of homes on the market continues to swell. Listings rose 31.5% in May compared to the same month a year ago, according to Realtor.com data.

“More available [housing] inventory to choose from, coupled with this week’s decline in mortgage rates, could be the spark to get potential homebuyers off the sidelines,” said Freddie Mac Chief Economist Sam Khater in a statement.

Those sentiments were echoed by Realtor.com’s Senior Economic Research Analyst Hannah Jones, who wrote that the summer housing market could be more active than the spring market was, which is not typically the case.

“Steady mortgage rates and improving buyer sentiment may set the stage for a bustling summer housing market,” Jones wrote in a report. “While home prices remain elevated, market conditions are gradually tilting in favor of buyers, thanks to rising inventory, longer time-on-market, and climbing price reductions.”

That will be welcomed by potential homebuyers, as the market is already seeing increased concessions and lowered list prices in order to woo buyers.

In fact, the number of listings that have reduced prices is up more than 31% year-over-year, according to Realtor.com.

Mortgage rates could come down later this year if the U.S. Federal Reserve lowers its own interest rates as expected. While separate from mortgage rates, the two generally move in the same direction. So, if the Fed cuts rates, mortgage rates are likely to follow.