Mortgage rates fall for the third week in a row. Buyers are on their way.
Mortgage rates ticked down for the third week in a row, but buyers are taking their time before they jump in.
The 30-year fixed-rate mortgage averaged 6.08% as of Sept. 26, according to data released by Freddie Mac on Thursday. That’s the lowest level since mid-September 2022.
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The rate is down 1 basis point from the previous week. One basis point is equal to one hundredth of a percentage point.
A year ago, the 30-year rate was averaging 7.31%.
The average rate on the 15-year mortgage was 5.16%, up from 5.15% last week. The 15-year rate was at 6.72% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily had the 30-year fixed-rate mortgage averaging 6.15% as of Thursday morning. The Mortgage Bankers Association’s survey noted that the 30-year was at 6.13% as of Sept. 20.
The big picture: Mortgage rates are 123 basis points lower than they were a year ago, but those most excited by the news and motivated to act are homeowners who recently bought homes when rates were over the current 6%. “[Refinancings] appear to be on the cusp of a massive surge if rates go lower,” Brian Reynolds, chief market strategist at Reynolds Strategy, wrote in a note on Thursday.
Home buyers are dribbling in, as seen by recent data from contract signings in August, but they’ve yet to make a big come back.
Nonetheless, industry data sources suggest that home-buying activity could pick up very soon. Touring activity, a proxy for home-buying interest, is up 8% from the start of the year, real-estate brokerage Redfin noted in a blog post.
“Rate cuts have sparked more showings; we’re seeing all of our listings in the area get more traffic,” Andrew Vallejo, an Austin, Texas-based Redfin Premier agent, told the company. “It’s a nice glimmer of hope after a slow year in Austin.”
What Freddie Mac said: “Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment,” said Sam Khater, chief economist at Freddie Mac.
“Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks,” he said.