Is the End In Sight? U.S. Mortgage Rates Fall for the First Time in a Month

Key takeaways

• U.S. mortgage rates for 30-year fixes are at 6.71%, down from 6.79% the week before — the first decline in a month
• It’s still expensive for homeowners to borrow, with rates from 5.23% a year ago putting off would-be movers
• A new Redfin report reveals almost 92% of homeowners are already on a mortgage deal with under 6% interest

U.S. mortgage rates have fallen for the first time in weeks, giving hope to would-be homeowners and those looking to sell that the stagnant housing market might get moving soon. It depends on whether the Fed can win the war against high inflation, though the tide looks to be turning. We’ve got the lowdown below.

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What’s the latest on mortgage rates?

Freddie Mac confirmed in its latest Primary Mortgage Market Survey that the average 30-year fixed rate mortgage averaged 6.71%, down from 6.79% the week before. The 15-year average also fell from 6.07%, down from 6.18% last week.

The Mortgage Bankers Association’s survey drew a similar conclusion. It reported the 30-year average had fallen to 6.81% from 6.91% the week before, while 15-year mortgage averages had climbed down to 6.25% from 6.41%.

Lower mortgage rates are good news for buyers looking to move or get onto the property ladder, but borrowing is still much more expensive at the moment — a year ago, the average 30-year mortgage interest rate was 5.23%.

The malaise is creating a bit of a bind in the market, as homeowners don’t want to sell up — they face a double whammy of higher mortgage rates and not having anywhere to move to, thanks to slim pickings on the market.

Could mortgage rates come down further?

It’s hard to tell — while the Fed will almost definitely pause on interest rate increases this month, Fed officials have indicated they’re possibly not finished yet with interest rate hikes, which feed into the mortgage market.

But if they do come down, there’s likely to be a flood of new homes on the market and buyers to be found. A new report from Redfin found almost 92% of U.S. homeowners with mortgages have an interest rate below 6%, with 23.5% of that group having an interest rate below 3%, so it’s easier for them to stay put and wait out the rate hikes. Pending home sales have fallen by 17% from this time last year.

As for would-be investors looking to buy property, sellers staying where they are means there’s a significant housing stock shortage on the market, keeping home prices buoyant despite the stagnant economy.

The bottom line

It’s good news that mortgage interest rate averages have fallen again, but the reality is that it’s a tough time to be buying or selling a house right now. The silver lining is that it gives would-be homeowners more time to save up for a down payment — which AI investing is a great tool to help you achieve.

Inflation is slowly decreasing, but it’s still double what the Fed wants. Q.ai’s Inflation Protection Kit helps beat sticky inflation by holding a basket of TIPS, precious metals and commodities to help you grow your nest egg in a difficult economic environment. The secret ingredient? AI, which does the heavy lifting with the data and dynamically weights the Kit’s holdings for you.

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