Mortgage rates dropped to their lowest level in 19 months at the start of September, offering potential relief to homebuyers, according to the latest data from Freddie Mac.
- The average 30-year fixed-rate mortgage (FRM) fell to 6.20% as of September 12, down from 6.35% last week. This marks the lowest rate since February 2023.
- A year ago, the 30-year FRM was significantly higher at 7.18%.
Why it matters: The dip in mortgage rates signals a more favorable borrowing environment for prospective homebuyers. However, despite the rate drop, buyers remain hesitant, facing the twin challenges of high home prices and a persistent shortage of available properties.
What They’re Saying: Freddie Mac’s Chief Economist Sam Khater attributed the rate drop to softer economic data. “Rates continue to soften due to incoming economic data that is more sedate. But despite the improving mortgage rate environment, prospective buyers remain on the sidelines, as they negotiate a combination of high house prices and persistent supply shortages,” Khater said.
Between the lines: Even as mortgage rates improve, the real estate market remains constrained by affordability issues. Many buyers are finding it difficult to enter the market due to elevated home prices and a rising, but still limited, inventory environment.
