While reporting a small uptick for the first time in over a month on Thursday, mortgage rates remain near 11-month lows after a recent decline that could benefit homebuyers in some states more than others.
According to a new analysis by Realtor.com, markets with a greater usage of mortgages stand to gain the most from lower borrowing costs, while those which already have a high share of homeowners who own their homes free and clear might see less of an impact.
What Is Going On With Mortgage Rates?
Mortgage rates, which had reached lows of 2-3 percent during the pandemic, suddenly shot up in 2022 in response to the Federal Reserve’s aggressive rate-hiking campaign to combat the rise of inflation. For the past three years, they continued hovering between 6.5 percent and 7 percent, contributing to the affordability crisis pushing homeownership out of reach for millions of Americans.
Things started to change a few weeks ago, when it became clear that the Federal Reserve would cut interest rates for the first time this year, during its September meeting. In anticipation of the widely expected move, mortgage rates fell to the lowest level since fall 2024.
Last week, the Federal Reserve cut its benchmark interest rate by a quarter point to a range of 4.0 percent to 4.25 percent, while expressing a cautious outlook for the near future.
As some experts had predicted, mortgage rates rose modestly in the week following the Federal Reserve’s decision. The average rate on 30-year fixed home loans climbed to 6.3 percent for the week ending September 25, up from 6.26 percent the week before, according to Freddie Mac.
But even with this uptick,
Map Shows Where Falling Mortgages Could Spark Biggest Housing Shift
