30-year mortgage rate hits 2-year low

The average rate on a 30-year fixed-rate mortgage was nearly unchanged this week but reached its lowest level in two years.

Thirty-year mortgage rates averaged 6.08% as of Thursday, down from 6.09% a week earlier, according to Freddie Mac data.

Average 15-year mortgage rates rose one basis point to 5.16%.

As mortgage rates hover around 6%, potential buyers are tiptoeing back into the market, and some homeowners who bought when interest rates topped 7% are weighing refinancing. Mortgage applications jumped to the highest level in more than two years last week, driven largely by refinancing volumes.

“Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks.”

Thirty-year mortgage rates have dropped more than a percentage point since May.

Read more: Mortgage and refinance rates today, September 26, 2024: Rates finally decrease

The Pending Home Sales Index, a measure of housing contract activity, rose 0.6% to 70.6 in August, improving slightly from July’s record-low reading, according to the National Association of Realtors. A level of 100 is equal to the amount of contract activity seen in 2001.

“Buyers are finally getting more comfortable with the rate,” said Selma Hepp, chief economist at real estate data provider CoreLogic. “I don’t think that’s going to mean a big boost for home sales this year given how low they’ve been so far, but still, it’s a little bit of improvement.”

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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