US 30-Year Mortgage Rate Declines to 6.13%, Refinancing Increases – Reuters

The interest rate for the most popular home loan in the United States has decreased to 6.13%, marking the lowest level in nearly two years, according to data released by the Mortgage Bankers Association. This decline has spurred a notable increase in refinancing activity.

Last week, the average contract rate for a 30-year fixed-rate mortgage fell by 2 basis points, reflecting a smaller shift compared to the recent half-percentage point cut in the Federal Reserve’s policy rate.

Mortgage rates had been on a downward trend for several weeks prior to the Fed’s announcement and are now more than 0.75 percentage points lower than in July and down over 1.75 percentage points from the peak levels seen in October 2023.

Homeowners have seized the opportunity presented by the drop in mortgage rates, leading to a substantial rise in refinancing applications. Currently, refinancing represents over 57% of all mortgage applications, significantly exceeding the historical median of 48%.