Mortgage rates finally dropped last week after five weeks of continuously creeping up, but remain much higher than they were during this time last year, according to a primary mortgage market survey update by the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac.
The group published a new report on Thursday showing that the 30-year fixed-rate mortgage—the most popular type of home loan among American homebuyers—averaged 7.18 percent in the week ending on August 31, 2023, 0.5 percent down from the previous week.
While any drop could be a relief to homebuyers struggling with high mortgage rates, the rate remained higher than it was during this time last year, when it averaged 5.66 percent. The 15-year fixed-rate mortgage was also higher than last year’s 4.98 percent, at an average of 6.55 percent.
In this picture: Maintenance workers mow the lawn in front of a housing development sign near new homes in Fairfax, Virginia, on August 22, 2023. Mortgage rates dropped last week according to Freddie Mac’s latest primary mortgage market survey update. ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
The sudden rise of mortgage rates in the past year, closely linked to the Federal Reserve’s aggressive rate-hiking campaign to bring down inflation, has come as a shock to the booming U.S. housing market.
Low mortgage rates during the pandemic had contributed to an explosion in demand, which combined with low inventory led homebuyers to bidding wars that contributed to prices skyrocketing between 2020 and 2022. But when high prices met with higher mortgage rates last year, demand—and sales—started to decline, triggering a so-called
Mortgage Rate Update Amid Housing Market Uncertainty
