Mortgage rates dropped a second week in a row following a positive inflation report showing prices continue to moderate and the Federal Reserve's decision to pause on interest rate hikes, according to Freddie Mac.
The average rate for a 30-year fixed-rate mortgage dropped to 6.69% for the week ending June 15, according to Freddie Mac's Primary Mortgage Market Survey. That's down from last week when it averaged 6.71%. Mortgage rates remained above last year when the average was 5.78%.
The average rate for a 15-year mortgage was 6.10%, up from 6.07% last week and up from 4.81% last year.
"Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve," Freddie Mac Chief Economist Sam Khater said. "As inflation continues to decelerate, economic growth is slowing, and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next."
If you are looking to buy a home, you can take advantage of lower mortgage rates and shop for the best rate on a loan. You can visit an online marketplace like Credible to compare rates, choose your loan term, and get preapproved with multiple lenders at once.
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Despite the dip, mortgage rates remained in the 6% to 7% range and are not expected to drop significantly this year, according to Realtor.com economic data analyst Hannah Jones. Only a reversal of the interest rate increase would really move the needle on mortgage rates, and that is only likely to happen once the Fed reaches its 2% inflation target.
"Though slowing inflation signifies better economic conditions ahead, borrowing, including for a home purchase, is likely to remain expensive for the remainder of the year," Jones said in a statement. "Incoming economic data will reveal whether enough has been done to bring inflation back down to the 2% target.
"The interest rate hikes to date are likely to take some time to move through the economy, and the Fed will adjust policy as they see fit in upcoming meetings," Jones continued. "Importantly, June's updated Summary of Economic Projections suggested that more hikes are possible by the end of the year as the median end-of-year federal funds rate expectation increased half a point from March's expectation."
If you're trying to find the best mortgage rate, it can help to shop around. You can visit the Credible marketplace to compare options from different lenders at once without affecting your credit score.
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Homebuyers continue to show signs of adjusting to 30-year mortgage rates in the 6% to 7% range, according to Keeping Current Matters Chief Economist George Ratiu.
"The psychological shock from last year seems to be dissipating, and buyers are running the math to calculate their revised purchasing budgets as they look for a home," Ratiu said in a statement. "The mood has been mirrored by rising foot traffic at open houses, which registered higher volume in the last months compared to the pre-pandemic period of 2017-19.
"In affordable real estate markets—especially in the Midwest, Mid-Atlantic, and Northeast—prices are on the rebound, Ratiu continued. "In a surprising sign of market resilience, and while nowhere near the frenzy of 2021, some locales are even seeing multiple offers on well-priced homes."
If you are ready to shop for a mortgage, you could get a better rate by looking at several lenders. You can visit Credible to help you compare interest rates from multiple mortgage lenders and choose the one with the best rate for you.
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