Mild shift in borrowing costs breaks weeks-long trend
After weeks of remaining stubbornly high, US mortgage rates experienced a modest decline this past week, offering a glimmer of welcome news for prospective homebuyers.
According to data released by Freddie Mac, the average 30-year fixed-rate mortgage ticked down to 6.85%, while the 15-year rate settled at 5.99%. These represent the first decreases observed in several weeks, though experts suggest rates may largely remain within their current ranges throughout 2025.
Speaking on the recent shifts, Yahoo Finance housing reporter Claire Boston noted that despite these small pullbacks, they are “not really moving the needle at all when we talk about mortgage rate affordability.” She highlighted that rates have largely been “stuck range bound in this sort of 6.7% to 6.9% for pretty much all of this year.”
However, the slight dip in rates arrives alongside more encouraging developments in the US housing market’s inventory. Sam Khater, Freddie Mac’s chief economist, stated that the decrease in average mortgage rates is “welcome news to potential home buyers who are also seeing inventory improve, house price, house price growth slow as well here.”
Further data supports this positive trend. Realtor.com’s May monthly housing trends report revealed that the number of homes for sale across the US has surpassed 1 million for the first time since 2019. Boston elaborated on these findings, indicating that overall inventory is up approximately 30%. Despite this significant stride, she cautioned that the current inventory levels are still about 14% lower than pre-pandemic figures, suggesting the market has yet to fully recover.
The improvement in inventory also shows a distinct geographic divide. While there is more inventory than ever before in the South and the West, the Midwest and Northeast regions continue to face a scarcity of homes for sale. This indicates that the housing recovery is not uniform across the nation, presenting a “tale of a bunch of different markets.”
As of June 5, the average 30-year fixed-rate mortgage stands at 6.85%, a minor reduction from 6.89% a week prior. Similarly, the 15-year fixed-rate mortgage moved to 5.99%, down from 6.03%. While these changes are small, they mark a notable shift after a period of stagnation.
What are your thoughts on the impact of the recent rate drops? Share your insights below.
