US mortgage rates decrease as Fed rate-cut expectations mount

MORTGAGE rates in the US dropped for the fifth time in six weeks.

The average for a 30-year, fixed loan was 6.89 per cent, down from 6.95 per cent last week, Freddie Mac said on Thursday (Jul 11).

Homebuyers are starting to see slight signs of relief. Mortgage rates have eased in recent weeks from around 7 per cent, where it hovered in April and May. More properties are coming to market after years of slim pickings.

House hunters are “seeing more inventory on the market, including a fair number of listings with price cuts, which is an encouraging sign”, Sam Khater, Freddie Mac’s chief economist, said.

US inflation, as well as hiring and wage growth, slowed in June, boosting expectations that the Federal Reserve can cut its benchmark rate this year. Fed chair Jerome Powell reiterated this week that the central bank will be guided by data on its path for future rate cuts.

“This data should build Fed confidence that its target is in sight, and could pave the way for a signal in the July Fed statement that a rate cut is on the horizon,” said Danielle Hale, Realtor.com chief economist. “This should help improve interest rates, such as mortgage rates, much sooner, especially if the data continue on this trend.” BLOOMBERG