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In the US, mortgage rates have fallen to their lowest level in 15 months. According to Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage is now 6.47 percent.
The decline comes ahead of the expected interest rate cut by the Federal Reserve in September.
Related topics: Record-high mortgage rates in the US are destroying homebuyers' dreams
“Mortgage rates fell this week to their lowest levels in over a year, likely an overreaction to a less than favorable jobs report and turmoil in financial markets for an economy that is still on solid footing,” said Sam Khater, chief economist at Freddie Mac, in a company press release. He noted that the rate drop also offers some homeowners better options for refinancing their mortgages.
The June jobs report and other economic indicators led to a turbulent week on Wall Street as fears of a recession mount among investors and homeowners.
Meanwhile, the Fed's expected rate cut in September triggered a decline in 10-year Treasury yields, which in turn led to a sharp drop in mortgage rates.
Mortgage interest rates reached a record high of 7.49% in September 2023.
Related: Jamie Dimon says a mild recession is still possible: “There's a lot of uncertainty out there”
Still, the real estate market remains volatile as home prices remain unaffordable for many – and some experts say potential interest rate cuts could soon herald even higher home prices.
“If rates drop just one more percentage point — I hope by the end of the year — prices will go through the roof,” real estate expert Barbara Corcoran told Fox Business in March. “If you wait until rates drop another point, I don't think you'll gain anything, you'll end up paying more.”
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