Breaking News: U.S. Mortgage Rates Hit Lowest Level in 1.5 Years After Fed Rate Cut
In a significant development for the housing market, U.S. mortgage rates have plummeted to their lowest level in over a year and a half following the Federal Reserve's recent interest rate cut. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage now stands at 6.09%, the lowest since February 2023. Similarly, the average rate on a 15-year fixed-rate mortgage has dropped to 5.15%, also the lowest reading since February 2023.
The Fed's decision to slash its benchmark overnight interest rate by 50 basis points to the 4.75%-5.00% range has paved the way for these record-low mortgage rates. While lower borrowing costs may not have a substantial impact on the housing market this year, they could incentivize more homeowners to list their properties for sale. However, with most homeowners already locked into mortgage rates below 4%, supply constraints continue to pose a challenge.
Despite the potential for increased supply, demand may outpace availability, leading to sustained high house prices. Fannie Mae has projected that existing home sales this year will hit their lowest point since 1995 due to affordability issues. Fed Chair Jerome Powell acknowledged the housing market's challenges, emphasizing the need for more supply to meet demand.
In conclusion, the current scenario presents a unique opportunity for potential homebuyers to capitalize on historically low mortgage rates. However, it also underscores the importance of addressing housing supply shortages to ensure a balanced and sustainable real estate market in the long run. Stay informed and make informed financial decisions to secure your future.