Mortgage rates fell to the lowest level of the year this week, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage fell to 6.58% from last week’s reading of 6.63%.
The average rate on a 30-year loan was 6.49% a year ago.
“Mortgage rates fell to their lowest level since October,” said Sam Khater, Freddie Mac’s chief economist. “Purchase application activity is improving as borrowers take advantage of the decline in mortgage rates.”
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The average rate on the 30-year fixed mortgage on Oct. 24, 2024, was 6.54%.
Meanwhile, the average rate on the 15-year fixed mortgage fell to 5.71% from last week’s reading of 5.75%. One year ago, the rate on the 15-year fixed note averaged 5.66%.
The U.S. is still in the midst of a housing affordability crisis, that continues to deepen with high home prices and elevated interest rates reducing homebuying to its lowest level since the mid-1990s, according to the annual State of the Nation’s Housing report from the Joint Center for Housing Studies (JCHS) of Harvard University.
To exacerbate issues, homeowners and landlords are also facing higher insurance premiums and property taxes. The exorbitant rent has also left “more people than ever cost burdened, and has contributed to a sharp rise in homelessness,” according to the report.
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Treasury Secretary Scott Bessent said on Thursday that one of his top priorities is addressing the U.S. housing affordability crisis.
“We are really going to work on this housing affordability crisis. That’s one of my big projects for the fall,” Bessent told FOX Business’ Maria Bartiromo during an interview on “Mornings with Maria.”
Real estate transactions tend to peak from May through August, with June historically being the busiest month, according to housing industry experts. But during this summer season, activity has remained “sluggish” for existing homes and new ones, according to Realtor.com senior economist Joel Berner.
While some homebuyers who have been relegated to the sidelines by high financing costs got some encouragement last week, Berner said it may take a bit longer to get more of them back in the game.
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