Impacted by expectations of a Fed rate cut, the 30-year US mortgage rate drops to 6.77%

Source: Global Market Coverage

Data released on the 16th by Freddie Mac, a U.S. government-sponsored mortgage institution, showed that the average rate for 30-year fixed mortgages in the U.S. fell to 6.77%, marking the lowest level since mid-March this year. This reflects the market’s growing anticipation that the Federal Reserve will soon begin to cut interest rates.

The data showed that as of the week ending July 16, the 30-year fixed mortgage rate in the U.S. dropped 12 basis points from the previous week’s 6.89%, but remained above the 6.96% seen during the same period last year. Meanwhile, the average rate for 15-year fixed mortgages decreased from 6.17% the previous week to 6.05%.

Market analysis pointed out that the recent slowdown in U.S. inflation data and the cooling labor market have further solidified financial market expectations for a Federal Reserve rate cut at its policy meeting this fall. As a result, U.S. 10-year Treasury yields—which serve as a benchmark for mortgage pricing—have continued to decline, directly pulling down end mortgage rates.

Freddie Mac Chief Economist Sam Khater stated that lower mortgage rates slightly ease financing cost pressures for homebuyers. However, due to the long-term tight housing inventory across the U.S. and persistently high home prices, the overall activity in the housing market remains limited. Analysts believe that a moderate short-term drop in mortgage rates will be difficult to fundamentally resolve the supply and demand imbalance in the U.S. real estate market.