There were signs that the U.S. economy was slowing down, so mortgage rates dropped to their lowest level since early April.
Freddie Mac FMCC, +8.43% said Thursday that the average rate for a 30-year fixed-rate mortgage as of June 27 was 6.86%.
It’s down one basis point from the week before. One basis point is equal to a hundredth of a percentage point.
For the fourth week in a row, rates have gone down.
The 30-year bond had an average rate of 6.71% a year ago.
The average rate on a 15-year loan went up from 6.13% last week to 6.16% this week. A year ago, the 15-year was at 6.06%.
When a borrower applies for a mortgage, thousands of applications are sent to Freddie Mac from lenders across the country. This information is used to make Freddie Mac’s weekly report on mortgage rates.
A separate report from Mortgage News Daily showed that the average rate on a 30-year fixed-rate mortgage was 7.05% on Thursday afternoon. Based on a survey by the Mortgage Bankers Association, the 30-year rate was 6.93% on June 21.
In general, lower mortgage rates help people who want to buy a home because they lower the amount of interest they pay each month. That might change how many homes are sold in the next few months.
Redfin, a real estate brokerage, found that the median monthly mortgage payment for a home priced at $400,000 at the end of June was $2,785. The amount paid has gone up 7.5% since last year.
What Freddie Mac said: “By historical standards, the economy is in good shape,” said Sam Khater, chief economist at Freddie Mac. “We expect rates to continue to come down over the summer months, bringing more homebuyers back into the market.”
What do they mean? “The number of homes for sale is going up, though it started out very low, and mortgage rates are now below 7%.” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement, “This is good news for people who want to buy a home and move before the school year starts, especially those with children.”
