Mortgage Interest Rates Forecast

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Written by Taylor Getler
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Edited by Mary Makarushka
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Mortgage rates this week

Mortgage rates fell across the board in the week ending July 11, and both 30-year and 15-year fixed-rate loans saw their biggest week-over-week drops since early May.

  • The 30-year fixed-rate mortgage averaged 6.77% APR, down 17 basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

  • The 15-year fixed-rate mortgage averaged 6.11% APR, down 12 basis points from the previous week's average.

  • The 5-year adjustable-rate mortgage averaged 7.65% APR, down eight basis points from the previous week's average.

Home shoppers will be pleased to see rates falling this week and should be heartened by the consumer price index (CPI) report released on July 11. The report, which measures changes in the prices of goods and services, showed that inflation is declining. This is the kind of positive economic data that the Federal Reserve wants to see before committing to a rate cut, bolstering hopes that lower rates could be coming in the fall.

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July mortgage rate forecast

It appears that mortgage rates peaked for the year in May. We won't know for sure until the end of December, but the trend has been downward.

Mortgage rates tend to drop when the inflation rate falls. If inflation continues to diminish in July, mortgage rates might keep trending slightly lower.

Home prices rise and fall seasonally, and they're usually highest in June. If mortgage rates go down this autumn, as expected, the combination of lower home prices and interest rates could make homes a bit more affordable.

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What other forecasters predict

Fannie Mae and the Mortgage Bankers Association revised their mortgage rate forecasts upward in May as inflation has proved tenacious. Fannie Mae's prediction is less optimistic than the MBA's.

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