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Mortgage Rates Tick Down Again: Freddie Mac
By Leslie Cook MONEY RESEARCH COLLECTIVE
According to Freddie Mac’s benchmark survey, the average rate on a 30-year fixed-rate mortgage has dipped to 6.69%.
Mortgage rates continued to move lower this week.
The average rate on a 30-year fixed-rate mortgage decreased to 6.69%, according to Freddie Mac. That represents a change of 0.02 percentage points over the past seven days.
Rates on the 15-year fixed-rate loan were higher, moving to 6.10%, a change of 0.03 percentage points from the prior week.
The Fed skips a rate hike, but more are likely to come
As expected, the Federal Reserve announced that they were holding short-term interest rates steady for the time being.
The pause in rate hikes comes as inflation is cooling — but not as fast as the central bank would like. By holding the Fed funds rate at its current range of 5% to 5.25%, the agency is taking a wait-and-see approach before its next meeting in July.
On Tuesday, the Bureau of Labor Statistics reported that inflation increased by 4% year-over-year in May, the smallest increase in over two years. But while headline inflation was significantly lower than the previous month, core inflation, which excludes volatile prices for food and energy, was 5.3% — well above the Fed’s target range of 2%.
At a press conference, Fed chairman Jerome Powell said that while progress has been made in its fight against inflation, the central bank will likely need to implement additional rate hikes to achieve its goals. That means the Fed funds rate could reach 5.6% by year’s end.
Mortgage rates aren’t directly tied to the Fed fund, but they are influenced by it. Borrowers hoping for significant relief from rates that are hovering close to 7% will have to wait until the economy shows more consistent signs of weakness, says Melissa Cohn, regional vice president of William Raveis Mortgage,
“We have been on a roller coaster,” Cohn said in an emailed statement. “Once the volatility eases, rates should drop nicely.”
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Leslie Cook is the Lead Mortgage Reporter covering mortgages and the housing market for Money. She has been a guest on the This Morning with Gordon Deal radio show and served as moderator for ServiceLink's State of Homebuying webinar. Her career started as a business reporter over 30 years ago, covering the computer and human resources beats for Caribbean Business newspaper in San Juan, Puerto Rico. She graduated Cum Laude from Bryn Mawr College in Pennsylvania with a bacheloru2019s degree in history.