The interest rate for the most popular U.S. home loan plunged last week to its lowest level in 15 months, after the Federal Reserve signaled it could start cutting its policy rate in September and a downshift in the job market bolstered financial market bets the reductions in borrowing costs would be big.
The average contract rate on a 30-year fixed-rate mortgage dropped 27 basis points in the week ended Aug. 2, to 6.55 percent, the Mortgage Bankers Association (MBA) said on Wednesday. That was the lowest rate since May 2023 and the sharpest drop in two years.
The decline gives potential homebuyers some long-hoped-for relief in what has become an increasingly unaffordable housing market in recent years, as home prices and borrowing costs both rose.
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