"The average rate on a 30-year mortgage was at 6.35% last week, its lowest level in nearly a year, according to mortgage buyer Freddie Mac. A similar pullback in mortgage rates happened around this time last year in the weeks leading up to the Fed's first rate cut in more than four years. Back then, the average rate on a 30-year mortgage got down to a 2-year low of 6.08% one week after the central bank cut rates."
""Rates could come down further, as the Fed has signaled the potential for two more rate cuts this year," said Lisa Sturtevant, chief economist at Bright MLS. "However, there are still risks of a reversal in mortgage rates. Inflation heated up in August and if the September inflation report shows another bump in consumer prices, it's possible we could see rates rise.""
"As expected, the central bank delivered a quarter-point cut Wednesday and projected it would lower its benchmark rate twice more this year, reflecting growing concern over the U.S. job market. Here's a look at factors that determine mortgage rates and what the Fed's latest move means for the housing market: How rate cuts affect mortgage rates Mortgage rates have been mostly falling since late July on expectations of a Fed rate cut."
The Federal Reserve delivered a quarter-point benchmark rate cut and projected two additional cuts this year amid growing concern about the U.S. job market. Mortgage rates have fallen since late July, with the 30-year average at 6.35%, though rates were previously near a 2-year low of 6.08% after last year's initial cut and later rose above 7%. Mortgage rates do not directly mirror the Fed's policy rate; they are driven by bond-market yields, investor expectations for the economy and inflation, and typically follow the 10-year Treasury yield. Further Fed cuts could push mortgage rates lower, but inflation spikes could reverse that trend.
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