While mortgage rates barely registered a dip this week, it was enough for economists to report they’ve reached their lowest point in two years, helping to keep refinance activity buzzing along in recent weeks as well. 

According to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac, the average 30-year fixed-rate mortgage (FRM) dipped to 6.08% this week, down from last week’s drop to 6.09%. A year ago at this time, the 30-year FRM averaged 7.31%.

“Although this week’s decline was slight, the 30-year fixed-rate mortgage trended down to its lowest level in two years,” said Sam Khater, Freddie Mac’s chief economist. “Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment.” 

But Khater also noted that many looking to purchase a home “are playing the waiting game” to see if rates decrease further as additional economic data is released over the next several weeks.

One segment of the survey, the 15-year FRM, moved up this week, averaging 5.16%, up from last week’s average of 5.15%. A year ago at this time, the 15-year FRM averaged 6.72%, Freddie Mac stated.

Realtor.com Economist Jiayi Xu, commented, “After nearly a year of speculation about when rate cuts would start, recent signs of softer inflation and a cooling labor market have given the Fed the confidence to begin normalizing policy.”

Longer-term interest rates have started reflecting this shift, Xu pointed out, with the 10-year yield down to 3.8% from its calendar-year high of 4.7% in April and slightly more from the 16-year high of 5.0% reached in October 2023. 

Looking ahead, Xu said with the Fed’s expected rate cut now in place and markets having largely priced in such changes, he doesn’t expect a significant drop in rates moving forward. 

“Mortgage rates are likely to stabilize in the 6%–6.2% range through the rest of the year, potentially dipping into the high 5% range by next spring,” Xu added.

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