Optimistic News for Homebuilders: Mortgage Rates Slide Below 7% Again
Once again, borrowing costs are showing a decline, with mortgage rates experiencing a slight drop this week after last month’s surge, which was attributed to a cooling housing market. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.99%, and while further decreases may be marginal, they could be forthcoming.
Freddie Mac’s chief economist, Sam Khater, explains, “Mortgage rates retreated this week due to incoming data indicating slower growth. Rates are hovering just below 7%, and we anticipate a modest decline throughout the remainder of 2024. For potential buyers considering a home purchase this year, waiting for lower rates could lead to minor savings. Nonetheless, it’s still highly beneficial to shop around for the best rate.”
According to National Association of REALTORS®, indeed, a new study released this week from LendingTree shows that borrowers who gather quotes from multiple lenders—three or more—stand to potentially save an average of $212 a month on their loan. That’s equivalent to $2,544 a year, or $76,410 over the life of the loan. Home buyers in California, New Jersey and Hawaii, where home prices are typically high, could save the most—potentially $115,000 or more over the life of their loan—by shopping around for a lower mortgage rate.
At this week’s average, the monthly mortgage payment on a median-priced $400,000 home, assuming a 20% down payment, is $2,127, says Jessica Lautz, deputy chief economist at the National Association of REALTORS®.
Freddie Mac reports the following averages with mortgage rates for the week ending June 6:
- 30-year fixed-rate mortgages: averaged 6.99%, falling from last week’s 7.03% average. A year ago, 30-year rates averaged 6.71%.
- 15-year fixed-rate mortgages: averaged 6.29%, dropping from last week’s 6.36% average. Last year at this time, 15-year rates averaged 6.07%.
