Mortgage rates continued to fall this week, with the average rate for a 30-year fixed home loan sinking from 6.95% last week to 6.87% for the week ending June 20, according to Freddie Mac.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market.”
Mortgage rates have hovered around the 7% mark, fluctuating slightly above and below this benchmark for nearly two months, creating a market largely stuck in neutral.
“For mortgage rates to drop more, the [Federal Reserve] needs to see more evidence of slowing inflation vis-a-vis lower [Consumer Price Index] readings and moderating employment growth,” Ralph McLaughlin, a senior economist at Realtor.com, said in a statement.
“Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024/early 2025,” he added.
The big picture: The more the economy shows signs of slowing, the more the market thinks that the Federal Reserve will cut interest rates, which in turn pressures mortgage rates down.
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