Mortgage rates drop to a three-month low. 'We expect rates to continue to come down over the summer months,' Freddie Mac says.

By Aarthi Swaminathan

30-year mortgage rate falls for fourth week in a row

Mortgage rates fell to their lowest level since early April as the U.S. economy showed indications of a slowdown.

The 30-year fixed-rate mortgage averaged 6.86% as of June 27, according to data released by Freddie Mac (FMCC) on Thursday.

It's down 1 basis point from the previous week - one basis point is equal to one-hundredth of one percentage point.

Rates are down for the fourth week in a row.

A year ago, the 30-year was averaging at 6.71%.

The average rate on the 15-year mortgage was 6.16%, up from 6.13% last week. The 15-year was at 6.06% a year ago.

Freddie Mac's weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.

Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 7.05% as of Thursday afternoon. The Mortgage Bankers Association's survey noted that the 30-year was 6.93% as of June 21.

The big picture: Lower mortgage rates help home buyers by lowering their interest costs on their monthly housing payments. And that could have an impact on home sales in the coming months.

The median monthly mortgage payment at the end of June was $2,785 for a median-priced $400,000 home, according to analysis by real-estate brokerage Redfin. Payments are up 7.5% from a year ago.

What Freddie Mac said: "By historical standards, the economy is in good shape, and we expect rates to continue to come down over the summer months, bringing additional homebuyers back into the market," Sam Khater, chief economist at Freddie Mac, said in a statement.

What are they saying? "Housing inventory is rising, albeit from very low levels, and mortgage rates are now below 7%. This is good news for prospective buyers - especially those with children - looking to move before the school year begins," Bob Broeksmit, president and chief executive of the Mortgage Bankers Association, said in a statement.

-Aarthi Swaminathan

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06-27-24 1202ET

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