SALT LAKE CITY — Mortgage rates were down again this week, but that may not last.
The average 30-year fixed-rate mortgage in the United States dropped to 6.67% for the week ending July 3, the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, reported.
That’s down 0.1 percentage points from the prior week, the largest weekly decline since early March. The average has been heading down for five consecutive weeks after reaching 6.89% in late May.
“Declining mortgage rates are encouraging and, while overall affordability challenges remain, more sellers are entering the market giving prospective buyers an advantage,” a Freddie Mac post stated.
But there are signs that trend is reversing.
Mortgage News Daily showed rates starting to climb again on Wednesday, with the average lender moving up 0.06% for what’s considered a “top tier” 30-year fixed-rate mortgage quote. Thursday, that rate moved up 0.02 percentage points, to 6.75%.
“Mortgage rates have generally been falling since May 21 and have done nothing but move lower for more than two weeks. That winning streak finally came to an end today,” a Wednesday post on the site said.
Still, Mortgage News Daily’s Matthew Graham noted, “While that’s a moderately big jump for a single day, if we remove the past four days from the equation, today’s rates would still be the lowest since early April. In other words, we’re still in solid shape in the bigger picture.”
Graham said rates started heading up in anticipation of Thursday’s job report. The better-than-expected addition of 147,000 jobs in June drove the nation’s unemployment rate down and made a case for the Federal Reserve to not lower interest rates.
If unemployment had increased, “the Fed would be cutting rates,” Graham posted Thursday.
Zions Bank mortgage manager Jeremy Holmgren agreed the streak of mortgage rate decreases is likely coming to an end.
“That appears to be the case,” Holmgren told the Deseret News, also citing the impact of the jobs report that put unemployment at 4.1%, down from 4.2%. There had been an expectation unemployment would rise slightly.
Other factors are also in play. Next week, President Donald Trump’s 90-day pause on his tariffs is set to expire, risking a trade war. Trump’s tariff policies already have roiled financial markets and sparked buyer hesitancy when it comes to making big purchases, such as a home.
“The market volatility continues to create challenges and uncertainty for potential homebuyers as affordability remains a concern,” Holmgren said. “That all being said, it is still an opportune time for people to buy homes.”
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