Mortgage rates fell this week, but further declines are expected after the benchmark 10-year Treasury yield fell 31 basis points since the beginning of the month.
It's down compared to last year, but not by a large margin.
The average for a 30-year fixed-rate loan was 6.89% as of Thursday morning, down from 6.95% on July 3 and 6.96% for the same week in 2023, according to Freddie Mac's Primary Mortgage Market Survey.
Meanwhile, the average yield on a 15-year fixed-rate loan was 6.17%, down from 6.25% last week and 6.30% a year ago.
Last week's PMMS was released a day early due to Independence Day.
“Following the June employment report indicating a cooling in the labor market, 10-year Treasury yields fell this week, and mortgage rates followed suit,” Freddie Mac chief economist Sam Carter said in a press release. “Additionally, there is an increase in inventory on the market, including at reduced prices, which is an encouraging sign for potential buyers.”
As of 11 a.m. Thursday, the yield on the 10-year Treasury note was just below 4.18%, down from a July 1 high of 4.49%.
The core consumer price index released on Thursday rose 0.1% in June from May and 3.3% from a year earlier. These figures do not include the costs of food and energy.
Shelter prices increased 0.2% from the previous month and 5.2% from June 2023.
“With recent data pointing to slowing inflation and job growth, we expect 30-year fixed rates to decline modestly to around 6.6% by year-end,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in Thursday morning comments on the association's weekly claims survey.
Experts from CNBC and Bloomberg noted this morning that the market is now expecting the Fed to cut short-term interest rates in September, but a July cut remains unlikely. Observers had previously expected one rate cut in December.
While the Fed's actions don't directly affect mortgage rates, they do influence investor behavior in longer-term bonds, such as the 10-year Treasury note.
As of 11 a.m. Thursday, the 30-year fixed rate was 6.936 percent. As of mid-morning July 3, the 30-year fixed rate mortgage was 7.023 percent, according to Lender Price Product and Pricing Engine data posted on the National Mortgage News website.
Zillow's interest rate tracker was at 6.54%, down 18 basis points from last week's average of 6.72%.