Mortgage rates reacted to positive economic data by dropping for a second week in a row, according to Freddie Mac. The average 30-year fixed-rate mortgage was 6.95% for the week ending June 13, according to Freddie Mac's latest Primary Mortgage Market Survey. That's a decrease from the previous week when it averaged 6.99%, but up from 6.69% a year ago. The average rate for a 15-year mortgage was 6.17%, down from 6.29% last week and up from 6.10% last year.
The slight dip in mortgage rates has spurred more activity in the market. Mortgage applications rebounded 15.6% for the week ended June 7 on a seasonally adjusted basis, according to data released by the Mortgage Bankers Association . Without adjustments, the index climbed 26% from a week ago. Mortgage refinancings increased 28% from the previous week and were 28% higher than one year ago.
The drop in borrowing costs is a break for home buyers but is likely insufficient to incentivize homeowners locked into historically low mortgage rates to move. A meaningful rate drop would require the Fed to dial back interest rates. Millennials and Gen Xers have locked in the lowest mortgage rates at roughly 4.0%, a recent Freddie Mac report said. Thirty-seven percent of millennials locked into their low rates in 2020 and 2021, buying their first home.
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