Mortgage rates this week have shown a slight decrease across the board. While the drop may not be significant, it is still a positive trend for potential homebuyers and those looking to refinance. The average rate on a 30-year fixed-rate loan was 6.74% in July, which is a decrease of eight basis points from June’s average of 6.82%. This slight decrease can make a difference in monthly payments for borrowers, especially when considering the long term.
According to data provided by Zillow to NerdWallet, the 30-year fixed-rate mortgage averaged 6.6% APR, down nine basis points from the previous week’s average. Additionally, the 15-year fixed-rate mortgage averaged 5.8% APR, showing a decrease of 10 basis points from the previous week. The 5-year adjustable-rate mortgage also saw a decrease, averaging 7.6% APR, down two basis points from the previous week. These decreases in rates can provide opportunities for borrowers to secure more favorable terms on their mortgages.
While mortgage rates may be hovering around the 6% mark for the time being, there is potential for further decreases in the future. The Federal Reserve has hinted at possible rate cuts later in the year, although these cuts are expected to be gradual, likely around 25 basis points at a time. It is also worth noting that the current downward movement in mortgage rates may already be reflecting the anticipated Fed cuts, which could mitigate the impact of these actions on mortgage rates.
Looking ahead to August, mortgage rate forecasts suggest that rates will continue to trend downward. Inflation plays a significant role in determining mortgage rates, with rates typically rising when inflation increases. However, with inflation slowing down, mortgage rates are expected to follow suit and continue their decline. Organizations such as Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors anticipate that mortgage rates will fall by less than a quarter of a percentage point in the third quarter of 2024.
Overall, the current mortgage rate environment presents opportunities for borrowers to secure favorable terms on their loans. Whether purchasing a new home or refinancing an existing mortgage, it is important for borrowers to stay informed about market trends and take advantage of any potential savings that may arise from lower rates. By monitoring mortgage rate forecasts and staying in touch with lenders, borrowers can make informed decisions that align with their financial goals.