Mortgage rates have dropped to their lowest level in over 14 months, offering potential homebuyers a brief respite from the relentless climb seen in recent years, according to the weekly survey from Freddie Mac.
- The 30-year fixed-rate mortgage averaged 6.47% for the week ending August 8th, a significant 26 basis point decline from the previous week. This marks the lowest level for the 30-year fixed rate since May 2023.
- Meanwhile, the 15-year fixed-rate mortgage saw an even steeper drop, falling 36 basis points to 5.63%.
What They’re Saying: This sharp decline in mortgage rates follows a turbulent week in financial markets, which saw a dramatic drop in the 10-year Treasury yield early in the week. Sam Khater, Freddie Mac’s Chief Economist, addressed this in the latest release, noting, “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.”
- Khater’s observation highlights the broader context of this rate dip. At the start of the week, global markets faced significant turbulence, leading to a nearly 30 basis point drop in the 10-year Treasury yield, a key indicator for mortgage rates. However, as the week progressed, the 10-year yield rebounded, nearly returning to last week’s closing level. This suggests that the drop in mortgage rates may be temporary, with a potential rise in rates likely in the coming week.
For prospective homebuyers, this decline represents a critical opportunity to secure lower financing costs, albeit with the caveat that the window may be short-lived. Financial experts suggest that anyone considering locking in a rate might want to act quickly before the anticipated rebound in rates occurs.