Mortgage rates continued to decline this week, easing some pressure on the tight U.S. housing market as the Federal Reserve intensifies efforts to stabilize the economy.
Freddie Mac reported Thursday that the average 30-year fixed-rate mortgage dropped to 6.09% for the week ending September 19, down from 6.20% the previous week and well below the two-decade high of 7.79% reached last fall. This marks the lowest rate since early February 2023.
The dip in mortgage rates offers a hopeful sign for potential buyers who have been waiting for housing affordability to improve.
However, a report from the National Association of Realtors (NAR) released Thursday showed a significant drop in sales of previously owned homes in August, despite the decline in mortgage rates that month. Still, with rates continuing to fall, a surge in housing demand is expected as the Federal Reserve cut interest rates this week for the first time in four years and indicated more cuts may come by year’s end.
Existing home sales, which dominate the housing market, decreased by 2.5% in August from the previous month to a seasonally adjusted annual rate of 3.86 million, according to NAR data. This represents the lowest August sales level since 2010. Meanwhile, home prices continued to rise, with the median price for an existing home increasing 3.1% to $416,700, marking the 14th consecutive year-over-year increase and setting a record for August home prices.
