Mortgage rates have dropped again according to a July 25 report by Freddie Mac. The recent decline comes amid weaker inflation and slowing job growth. The 30-year fixed mortgage rate fell to an average 3.62%, down from 3.75% the week before. This is the second week in a row that mortgage rates have decreased. The 15-year fixed rate mortgage also dropped, from an average 3.17% to 3.06% the week before.
The decline in mortgage rates is likely due to a few key economic factors. Inflation has fallen significantly in recent months, which is generally a sign that economic activity has slowed, reducing the demand for borrowing. Additionally, the labor market has softened over the past few months, with job growth slowing noticeably. The drops in job numbers and inflation have contributed to the decrease in mortgage rates.
Mortgage rates have generally been declining since the beginning of 2019. This can be attributed to the Federal Reserve’s decision in January to not raise interest rates. The Fed opted to leave rates unchanged in its March and June meetings, indicating that they are still committed to an accommodating monetary policy.
At the current mortgage rate of 3.62%, prospective homebuyers are likely to find an attractive environment for borrowing. Lower mortgage rates could help potential buyers to more easily afford the price of a home and should lead to more home sales. For current homeowners, the decline can also mean lower payments on existing mortgages.
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