US Mortgage Rates Drop to Lowest Level in 10 Months

On Monday, Redfin reported that the daily average mortgage rate dropped to 6.57% on August 4, the lowest level in 10 months.

According to Redfin, that decline gives a homebuyer with a $3,000 monthly budget approximately $20,000 more in purchasing power compared to May, when the daily average rate peaked at 7.08%. At today’s rate, that buyer can afford a $458,750 home, up from $439,000 in May.

Framed another way, the monthly mortgage payment on a median-priced US home (roughly $447,000) is now $2,862. That’s down from $2,983 in mid-May when rates were over 7%, a savings of more than $100 per month.

Redfin also noted that mortgage rates fell over the weekend following a weaker-than-expected July jobs report. The US added fewer jobs than forecast, and the unemployment rate ticked up, increasing the likelihood that the Federal Reserve could cut interest rates in September.

Commenting on the report, Redfin Chief Economist Daryl Fairweather Economics said:

“This dip in mortgage rates gives house hunters a window of opportunity to buy before summer ends. While housing costs are still fairly high, the recent decline in rates boosts purchasing power and improves overall homebuying conditions. Combined with the surplus of homes for sale on the market, serious buyers may want to jump in sooner rather than later.”