U.S. 30-year mortgage rates fall to year low as buyers await Fed rate cut

Freddie Mac said in a statement Thursday that the average rate on a 30-year fixed-rate mortgage was 6.46%, down from 6.49% last week. Borrowing costs have fallen sharply after breaking 7% earlier this year, which has boosted homebuyers' purchasing power and prompted some potential buyers to give up the sidelines. The National Association of Realtors (NAR) reported Thursday that U.S. existing home sales rose for the first time in five months in July. Although July existing home sales rose 1.3% month-on-month, it was still the slowest July growth rate since 2010, indicating that high housing prices and a shortage of affordable housing still keep many Americans away. Buyers and sellers may also wait until financing costs fall further before making a decision. "The sharp drop in interest rates earlier this month, currently hovering just below 6.5%, has not been enough to motivate potential homebuyers, and we expect that interest rates may need to fall another percentage point to drive buyer demand," said Sam Khater, Freddie Mac's chief economist.