Mortgage rates fall to their lowest level in almost three months

Mortgage rates in the US have fallen this week to their lowest level since early April, providing some relief to the unaffordable housing market. The average 30-year fixed-rate mortgage dropped from last week’s average of 6.95% to 6.87%. This marks the third consecutive weekly decline and comes after signs of cooling inflation and expectations of a future Federal Reserve rate cut. Despite the decrease, mortgage rates remain higher than the previous decade. However, economists do not expect the average mortgage rate to fall below 6% this year. High interest rates continue to constrain homebuilding, with construction weaker than anticipated in May. Additionally, sentiment among homebuilders has fallen to its lowest level since December. The US housing market also grapples with high home prices, particularly in California, New York, and Honolulu, where affordability remains a challenge. Potential homebuyers are faced with the obstacle of a large down payment, often exceeding the median salary of a US worker.