Lowest Rates in Over a Year

The average 30-year mortgage rate decreased this week to its lowest level in more than a year, providing a welcome affordability boost for prospective house buyers and homeowners hoping to refinance to a cheaper rate.

The rate declined to 6.47% from 6.73% the previous week, according to mortgage buyer Freddie Mac on Thursday. A year ago, the average rate was 6.96%, according to a recent article by Alex Veiga of Florida Realtors.

This is the second consecutive weekly decrease in the average rate. It is now the lowest it has been since mid-May of last year, when it was 6.39%.

Borrowing prices on 15-year fixed-rate mortgages, which are popular among homeowners renewing their house loans, decreased this week, bringing the average rate down to 5.63% from 5.99% the previous week. According to Freddie Mac, the average rate was 6.34% last year.

“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move,” said Sam Khater, Freddie Mac’s chief economist. “Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance.”

After reaching a 23-year high of 7.79% in October, the average 30-year mortgage rate has remained above 7% this year, more than doubling from three years ago.

The high mortgage rates, which may add hundreds of dollars to borrowers’ monthly bills, have discouraged home buyers, prolonging the nation’s housing slump into its third year.

Sales of previously inhabited U.S. homes declined in June for the fourth consecutive month. Sales of new single-family homes plummeted last month to their lowest yearly rate since November.

Rates have mainly fallen in recent weeks, with evidence of lowering inflation and a cooling labor market raising anticipation that the Federal Reserve will lower its benchmark interest rate next month.

This article originally appeared on Florida Realtors.