Mortgage rates fell for the second week in a row, mortgage buyer Freddie Mac said Thursday.
Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage decreased to 6.27% from last week's reading of 6.3%.
The average rate on a 30-year loan was 6.44% a year ago.
"Importantly, homeowners have noticed these consistently lower rates, driving an uptick in refinance activity," said Sam Khater, Freddie Mac's chief economist. "Combined with increased housing inventory and slower house price growth, these rates also are creating a more favorable environment for those looking to buy a home."
NEARLY 1 IN 5 AMERICAN HOMES SLASH PRICES AS BUYERS GAIN UPPER HAND IN SHIFTING MARKET
The average rate on the 15-year fixed mortgage fell to 5.52% from last week's reading of 5.53%.
One year ago, the rate on the 15-year fixed note averaged 5.63%.
Concerns over the labor market and uncertainty surrounding the ongoing federal government shutdown, continue to weigh on prospective homebuyers, according to Realtor.com senior economist Jiayi Xu.
"Nationwide, buying power has declined sharply, as home prices and mortgage rates continue to outpace income growth," Xu said. "As a result, substantial wage gains and improved financial stability will be essential to boost purchase sentiment."
"However, broader uncertainty from the ongoing government shutdown may further weigh on sentiment – especially in markets with a higher share of federal workers and contractors, who are facing financial strain and concerns over potential layoffs," she added.
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While lower mortgage rates have pulled homebuyers back into the market, many are still hesitant due to economic uncertainty and the affordability crisis plaguing the U.S.
