Mortgage rates dropped to a 12-week low of 6.67%, down from 6.77% last week, amidst market adjustments ahead of significant economic releases. This represents the largest decline in weeks and comes as more prospective buyers are encouraged by lower rates, despite ongoing affordability issues. The June jobs report, which showed robust growth, tempered hopes for a Federal Reserve rate cut. Mortgage purchase applications increased by 16% last week, indicating heightened buyer interest following a slow spring and an uptick in new listings and inventory.
The average rate on 30-year fixed home loans decreased to 6.67% for the week ending July 3, down from 6.77% last week, marking the biggest one-week decline since March.
Financial markets had also been growing more optimistic about the chances of a Federal Reserve rate cut later this month, although those hopes were dashed on Thursday morning when the June jobs report showed robust employment growth.
Declining mortgage rates are encouraging and, while overall affordability challenges remain, we are seeing more sellers enter the market giving prospective buyers an advantage, according to Freddie Mac's chief economist.
Mortgage purchase applications jumped 16% last week compared to one year ago, showing renewed interest from buyers, following sluggish activity in May.
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