Mortgage rates in US increase for first time since end of July
Housing market starting to benefit from an expectation that the Fed will cut its benchmark interest rate in September
US MORTGAGE rates climbed for the first time in three weeks.
The average for a 30-year, fixed loan was 6.49 per cent, Freddie Mac said on Thursday (Aug 15). Last week’s average was 6.47 per cent, the lowest in more than a year.
The US housing market has been starting to benefit from an expectation that the Federal Reserve will cut its benchmark interest rate at its meeting in September. A recent measure of inflation showed that price pressures are abating, bolstering the case for lower rates.
The 30-year rate “will likely trend down in the coming months as inflation continues to slow”, said Sam Khater, Freddie Mac’s chief economist.
“Lower rates are good news for potential buyers and sellers alike.”
Some of the gridlock in the housing market is already easing up. Homeowners have often been reluctant to sell and part with lower mortgage rates, limiting the amount of inventory for sale. But more properties are coming onto the market. In the four weeks to Aug 11, new listings climbed 4.5 per cent from the same period a year earlier, according to Redfin.
“In the medium-run, we expect the economy to land softly and housing inventory to continue to recover,” said Ralph McLaughlin, a Realtor.com senior economist. “This should put downward pressure on mortgage rates this fall and winter and will set the stage for a much better season for homebuyers in 2025.” BLOOMBERG
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