By Makailah Gause

Mortgage Rates Drop

NEW YORK (Reuters) – The average rate on the popular U.S. 30-year fixed-rate mortgage has decreased this week, reaching its lowest level since May 2023, though further declines may be needed for significant improvement in housing demand.

The 30-year fixed-rate mortgage averaged 6.46% during the week ending Aug. 22, down from 6.49% in the previous week, according to mortgage finance agency Freddie Mac. This is a decrease from 7.23% during the same period last year.

Sam Khater, Freddie Mac’s chief economist, noted that a softening tone in incoming economic data suggests rates will likely continue to ease through the end of the year. However, despite the declining rates, they have not sufficiently motivated potential homebuyers. Khater mentioned, “We expect rates likely will need to decline another percentage point to generate buyer demand.”

The National Association of Realtors (NAR) reported a 1.3% rise in existing home sales in July, marking an end to a four-month decline. Lawrence Yun, the NAR’s chief economist, stated, “Consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.” However, even with this modest gain, home sales remain slow, Yun added.