US mortgage rates climb slightly, holding near a four-month low

MORTGAGE rates in the United States ticked up, sticking close to the lowest level since March.

The average for a 30-year, fixed loan was 6.78 per cent, compared with 6.77 per cent last week, Freddie Mac said on Thursday (Jul 25).

While down from recent highs, elevated borrowing costs have sidelined house hunters who are also stretched by prices that soared to records. Sales of previously owned properties dropped for a fourth straight month in June, and new-home purchases also declined. With fewer eager buyers in the market, listings are lingering longer and more sellers are cutting their asking prices.

“Mortgage rates essentially remained flat from last week but have decreased nearly half a per cent from their peak earlier this year,” Sam Khater, Freddie Mac’s chief economist, said. “Despite these lower rates, buyers continue to pause.”

Softening inflation has bolstered expectations for the Federal Reserve to cut interest rates in September, which in turn could drive down mortgage costs. A reduction may help jump-start the sluggish homebuying market.

“Even if the Fed pledges only to remain ‘data dependent’, investors believe the data is consistent with a cut in the next month or so, and that should help mortgage rates remain steady to slightly lower,” Realtor.com chief economist Danielle Hale said. BLOOMBERG