Mortgage rates edged slightly higher in the week ending July 25, but are still near their lowest levels since spring.
The 30-year fixed-rate mortgage averaged 6.69%, up two basis points from the previous week’s average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.
This week’s change in the average rate was so small that it was imperceptible to most borrowers. Not counting the previous week, this week’s average 30-year rate was the lowest since the week ending March 28, when it also averaged 6.69%.
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Rates have headed lower since April
The week-to-week movements in mortgage rates can obscure the bigger story: that ever so slowly, mortgage rates have been on the decline since April. The 30-year mortgage averaged 7.04% in April, 7.01% in May, 6.82% in June, and 6.76% in the first three weeks of July. That’s a drop of only about a quarter of a percentage point in three months, but it appears that mortgage rates have nudged themselves off the chairlift and are skiing downhill.
As a result of lower rates, the typical monthly mortgage payment decreased for home buyers in June compared to buyers in May, according to the Mortgage Bankers Association. The association says the median principal-and-interest payment in June was $2,167, down from $2,219 in May. That’s a drop of $52.
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Existing home prices hit a new peak
Rates are moving in the right direction, but home prices aren’t. The median price paid for an existing home rose to an all-time high of $426,900 in June, according to the National Association of Realtors. That represented a 4.1% increase compared to 12 months earlier, and a 49.6% increase compared to $285,400 in June 2019.
As prices increased in June, fewer people bought homes — and the inventory of unsold homes on the market went up, NAR said. There were 1.32 million homes on the market at the end of June — an increase of 250,000 compared to a year before.
With buyers having more homes to choose from, the landscape is slowly shifting from a seller’s market, where home sellers call the shots, toward a balanced market. As a result, more buyers are able to insist on having home inspections “because now the buyers understand that they have [a] little more power compared to one year ago,” said Lawrence Yun, NAR’s chief economist, in a conference call.
