U.S. Mortgage Rates Drop Amid Federal Reserve Rate Cut Expectations

U.S. mortgage rates fell this week as the Federal Reserve is anticipated to cut interest rates. Despite the drop, housing market gains are limited due to high home prices and supply shortages. The 30-year fixed-rate mortgage decreased to 6.20%, the lowest since February, while the 15-year fixed-rate dropped to 5.27%.

U.S. mortgage rates have seen a decline this week, driven by expectations that the Federal Reserve will begin cutting interest rates next Wednesday. However, the reduced rates are unlikely to offer an immediate boost to the housing market, where prices remain high.

Data from Freddie Mac reveals that the average rate on the popular 30-year fixed-rate mortgage fell to 6.20%, marking its lowest point since February 2023, from 6.35% last week. This contrasts with last year's average of 7.18% during the same timeframe.

Similarly, the average rate on the 15-year fixed-rate mortgage declined to 5.27% from 5.47% last week, a significant drop from the average of 6.51% a year ago. Despite the improved mortgage rate environment, prospective buyers continue to face challenges posed by high house prices and a persistent supply shortage, noted Sam Khater, Freddie Mac's chief economist.

(With inputs from agencies.)