U
S mortgage rates have dipped to their lowest level in nearly 10 months, offering some respite to homebuyers after two years of high borrowing costs. According to Freddie Mac's latest survey, the average rate on a 30-year fixed mortgage fell to 6.56% as of August 28, down from 6.58% a week earlier.

    This modest decline marks the lowest reading since late October 2024 and reflects a broader trend of gradual easing in financial markets. As expectations of slower inflation and steadier economic growth take hold, rates are slowly coming down.

    The drop in rates has already sparked renewed interest among buyers. "Mortgage rates are at a 10-month low," said Sam Khater, Freddie Mac's chief economist. "Purchase demand continues to rise on the back of lower rates and solid economic growth."

    While rates remain higher than pre-pandemic levels, they have only slightly increased compared to last year. The average 30-year fixed mortgage averaged 6.35% in late August 2024.

    The combination of marginally lower borrowing costs and still-strong economic fundamentals could give the US housing market some momentum heading into the fall. However, affordability pressures remain a significant constraint, with elevated home prices, tight inventory, and household budget strain from broader inflation weighing on first-time buyers.

    Freddie Mac's weekly survey has been tracking mortgage rates since 1971 and remains a closely watched indicator for both the housing industry and investors, as mortgage trends often reflect the broader trajectory of the US economy and monetary policy.