The average interest rate on a 30-year fixed-rate mortgage remained virtually unchanged this week, but reached its lowest level in two years.
Thirty-year mortgage rates averaged 6.08% on Thursday, up from 6.09% a week earlier, according to data from Freddie Mac.
The average mortgage interest rate with a term of 15 years increased by one basis point to 5.16%.
With mortgage rates hovering around 6%, potential buyers are returning to the market, and some homeowners who bought when rates rose above 7% are considering refinancing. Mortgage applications rose to the highest level in more than two years last week, largely thanks to refinancing volumes.
“Given the downward trajectory of interest rates, refinancing activity continues to increase, creating opportunities for many homeowners to reduce their monthly mortgage payments,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “In the meantime, many looking to purchase a home are playing the waiting game to see if interest rates fall further as additional economic data is released in the coming weeks.”
Thirty-year mortgage rates have fallen more than a percentage point since May.
Read more: Mortgage and refinancing rates today, September 26, 2024: Interest rates are finally falling
The Pending Home Sales Index, a measure of home contract activity, rose 0.6% to 70.6 in August, improving slightly from a record low in July, the National Association of Realtors said. A level of 100 equals the amount of contract activity in 2001.
“Buyers are finally feeling more comfortable with the direction,” said Selma Hepp, chief economist at real estate data provider CoreLogic. “I don’t think this will be a big boost to home sales this year given the low levels so far, but it is still a small improvement.”
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
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