Mortgage rates drop for fifth straight week

Mortgage rates have once again dropped, marking a fifth consecutive week of decline. According to Freddie Mac, the average 30-year fixed mortgage rate was 6.67% as of Wednesday, down from 6.77% the previous week. Additionally, the average 15-year mortgage rate decreased to 5.80% from 5.89% last week.

Freddie Mac’s Chief Economist, Sam Khater, noted that the decreasing mortgage rates are encouraging for prospective homebuyers. Despite ongoing affordability challenges, more sellers are entering the market, providing buyers with an advantage.

The 10-year Treasury yield, which closely influences mortgage rates, also continued to decrease this week as investors monitored the Senate’s decision on President Trump’s spending bill. While the Federal Reserve does not directly control mortgage rates, the federal funds rate plays a significant role in determining interest rates for homebuyers. The Fed has not cut rates in 2025 and is not expected to do so at its upcoming meeting before Labor Day.

The steady decline in mortgage rates over the past five weeks has led to an increase in mortgage applications. According to the Mortgage Bankers Association survey, mortgage applications rose by 2.7% compared to the previous week. Additionally, pending home sales have seen a slight uptick, with a 1.8% increase in May over the previous month, as reported by the National Association of Realtors.

Overall, the decrease in mortgage rates is providing opportunities for both buyers and sellers in the real estate market. With more affordable financing options available, more people are looking to secure a mortgage and potentially purchase a home. The positive trends in mortgage rates and home sales indicate a promising outlook for the housing market in the coming months.