Mortgage rates fell further last week as the market responded to positive inflation indicators.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.87%, down from the week prior’s 6.95%. A year ago at this time, the 30-year FRM averaged 6.67%.
The 15-year also fell to 6.13% from 6.17%. A year ago at this time, it was 6.10%.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” said Sam Khater, Freddie Mac’s Chief Economist.
“These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market. Aspiring homeowners should remember it’s important to shop around for the best mortgage rate as they can vary widely between lenders.”
At talks around the country, Federal Reserve officials all voiced a “wait and see” mentality regarding rate cuts but were optimistic about inflation cooling significantly moving forward.
Consumer prices cooled in May, while wholesale prices fell unexpectedly, indications that monetary policy is on the right track.
“We’re clearly on the backside of inflation,” Richmond Fed President Tom Barkin said. “But the question is, ‘Are we all the way back?’”
Not all leaders are convinced that inflation is on the way out, however. St. Louis Fed President Alberto Musalem suggested that if inflation stays sticky, another rate hike could come back on the table.
“I will need to observe a period of favorable inflation, moderating demand, and expanding supply before becoming confident that a reduction in the target range for the federal-funds rate is appropriate,” he said in a speech.
“These conditions could take months, and more likely quarters to play out.”