Mortgage rates fall to lowest level since February 2023

Mortgage rates fell this week to the lowest point since February 2023, in a welcome sign for Americans grappling with a tough housing market.

The standard, 30-year fixed-rate mortgage averaged 6.20% in the week ended September 12, mortgage financing giant Freddie Mac said Thursday. That’s down from last week’s 6.35% and well below the two-decade high of 7.79% in October 2023.

Mortgage rates started to drop early last month on news affirming lower interest rates in the future, specifically after a weaker-than-expected jobs report for July, and have gradually edged lower since.

“Mortgage rates have fallen more than half a percent over the last six weeks and are at their lowest level since February 2023,” Sam Khater, Freddie Mac’s chief economist, said in a release. “Rates continue to soften due to incoming economic data that is more sedate. But despite the improving mortgage rate environment, prospective buyers remain on the sidelines, as they negotiate a combination of high house prices and persistent supply shortages.”

Economic data pointing to slower inflation and a weakening job market have paved the way for the Federal Reserve to roll out the first interest-rate cut since 2020, slated for the central bank’s upcoming policy meeting next week.

The Fed doesn’t directly set mortgage rates, but its action do influence them through movements in bond yields. The benchmark 10-year US Treasury yield, which moves in anticipation of the Fed’s decisions on interest rates, has tumbled over the past several weeks on data showing that price pressures are easing and that the job market isn’t heating up.

This story is developing and will be updated.