Facts: The average 30-year fixed mortgage rate from Freddie Mac fell to 6.20% this week from 6.35% last week. At 6.20%, with 20% down, a monthly mortgage payment on a home with a price of $400,000 is $1,960. With 10% down, the typical payment would be $2,205.

Positive: Interest rates are down 1.59% from October 2023. The savings on a $400,000 mortgage would be $341 monthly and $4,092 annually. This is substantial. Inflation is at the lowest level since February 2021—and the Fed is expected to cut the Fed Funds rate imminently.

Negative: Even with the September expected rate cut, mortgage interest rates are not likely to move as this cut has been baked into the mortgage market. Mortgage Bankers Association applications increased, but nearly 47% of the applications are refinancings—not new buyers. The overall housing market remains constrained due to the total cost of homeownership.
 

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