US Mortgage Rates Drop to Lowest Level Since May 2023

Mortgage rates in the U.S. dropped to the lowest level in 15 months, with the average interest rate for a fixed, 30-year mortgage now sitting at 6.47%, per Freddie Mac.

The drop comes ahead of the expected interest rate cut by the Federal Reserve in September.

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“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing,” Freddie Mac’s Chief Economist Sam Khater said in a company release, noting that the drop in rates will also give certain homeowners a better chance to refinance their mortgages.

The June jobs report, plus other economic indicators led to a wild week for Wall Street, as fear of a recession looms among investors and homeowners.

Meanwhile, the Fed’s expected rate cut in September triggered a drop in yields for 10-year treasuries, which, in turn, sent mortgage rates plummeting.

Mortgage rates hit a record high in September 2023, reaching 7.49%.

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Still, the real estate market remains volatile, as home prices remain out of reach for many — and some experts think the possibility of interest rate cuts could indicate even higher home prices soon.

“If rates go down just another percentage point — that’s what I’m hoping for by year-end — prices are going to go through the roof,” real estate maven Barbara Corcoran told Fox Business in March. “If you wait for interest rates to come down another point, I don’t think you’ll gain, I think you’ll wind up paying more.”