Mortgage rates reach new low for 2024 before anticipated Fed cut

U.S. mortgage rates are at lows not seen since early 2023, ahead of next week’s expected interest rate cut.

Why it matters: Easing mortgage rates offer house-hunters some relief. But experts say it’s going to take a bigger drop to revive the sluggish home market.

The latest: A small but growing number of people are taking out new mortgages.

• Mortgage applications hit a 19-month high in August and have continued to climb the last three weeks, according to the Mortgage Bankers Association.

Reality check: Mortgage rates won’t fall much immediately after the September Federal Reserve meeting, analysts say.

• Realtor.com chief economist Danielle Hale tells Axios she isn’t expecting them to dip below 6% this year.

Yes, but: For some homebuyers, a near-6% mortgage is good enough.

• “I am OK with the rate I got knowing I can always refinance,” says Jackie Elegant, who’s purchasing a Chicago condo.

The other side: Record home prices and low inventory continue to sideline many shoppers. And homeowners remain reluctant to give up their less expensive mortgages.

• Nearly 86% of U.S. mortgage holders have a rate under 6%, per Redfin.

The bottom line: Rates are volatile. “We see sharp moves daily,” sometimes as much as 0.25% up or down, HomeSimply owner Donny Kirby tells Axios.