Mortgage rates are finally dropping.
The U.S. weekly average for a 30-year fixed-rate mortgage fell to 6.63% Thursday, the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, reported. That’s down 0.09 percentage points from the week ending July 31, and the lowest rate since April.
And Mortgage News Daily posted a 6.55% rate for Thursday for the same type of home loan, a 0.02-percentage-point decline from Wednesday’s daily index. A week ago, the site had mortgage rates at 6.75%.
So are home loans going to keep getting cheaper?
Maybe, says Zions Bank Mortgage Manager Jeremy Holmgren.
For now, the dip is a “temporary fluctuation,” brought on by last week’s jobs report that “came in significantly worse than expected, triggering a drop in the 10-year Treasury note,” Holmgren said. The yield on that Treasury note fell 13 basis points last Friday to 4.236%, CNBC reported.
Since then, Holmgren said, “the market has remained relatively flat, with minimal movement in interest rates.”
But that could change. He said “if the 10-year Treasury breaks below the 4.0% level, we could see a more significant improvement in mortgage interest rates.”
Buyers may not want to wait to see if that happens.
“I always encourage buyers to act now,” Holmgren said.
“Waiting for the ‘perfect’ rate often means missing out on valuable time in the market. If rates continue to improve, there’s always an opportunity to refinance later, but in the meantime, you’re gaining equity and building long-term wealth through homeownership,” he said.
Holmgren also pointed out that “for Utah homebuyers, even a slight reduction in mortgage rates is welcome news as we continue moving — however gradually — toward a more affordable housing market.”
Redfin, a Seattle-based online brokerage, posted Thursday that buyers may want to take advantage now of a “window of opportunity to lock in a mortgage rate, as rates could fluctuate as more economic data is released in the coming weeks.”
At a 6.55% mortgage rate, a homebuyer with a $3,000 monthly budget can afford a $458,750 home and has gained some $20,000 in purchasing power since mortgage rates peaked at more than 7% in May, the Redfin post said.
Mortgage rates are “most closely linked” to the 10-year Treasury bond yield, seen as reflecting economic growth, inflation and other broader market trends, according to a Realtor.com explanation of how lenders calculate the rates.
The Bureau of Labor Statistics reported just 73,000 new jobs were added by U.S. employers in July, and revised the previous two months of jobs data downward. President Donald Trump claimed without evidence the numbers were “rigged” and fired the head of the bureau.
