Freddie Mac Mortgage Rates—July 18, 2024
What happened to mortgage rates this week
The Freddie Mac rate for a 30-year mortgage dropped 12 basis points to 6.77% this week as 10-year Treasury yields remained below 4.2%. In a recent talk, Powell mentioned that the central bank won’t wait for inflation to hit 2% before cutting interest rates due to the policy’s long lag effect. Instead, they are seeking greater confidence that inflation will return to the target before initiating rate cuts. Fortunately, June’s more moderate jobs report and cooling CPI were solid readings that should help the Fed gain more confidence that the economy is moving in the right direction and could raise hopes for a rate cut signal in the July FOMC statement. This development should help interest rates, including mortgage rates, continue on a downward trend, especially if the economy keeps making progress.
What it means for the housing market
Although mortgage rate relief has not arrived as quickly as many expected, the recent downward trend is encouraging news for homebuyers who have been hindered by high rates. In addition, the increase in affordable inventory brings hope to first-time homebuyers who lack substantial home equity to leverage.
Nevertheless, similar-sized homes are still more expensive than a year ago, with the listing price per square foot increasing by 3.4% in June compared to last year. Looking ahead, we expect the rising inventory to gradually exert downward pressure on price growth and falling mortgage rates to help lower borrowing costs, providing more relief to potential homebuyers.