WASHINGTON – Could mortgage rates fall even further if the Federal Reserve cuts its benchmark interest rate on Wednesday?

The answer is still unclear, but if implemented, this move is likely to result in lower borrowing costs for consumers and businesses just weeks before the presidential election.

The average interest rate on 30-year mortgages in the US fell to its lowest level in 19 months last week, due to a decline in US Treasury yields ahead of an expected rate cut by the US Federal Reserve.

According to Freddie Mac, the interest rate fell to 6.20% last week – down from 6.35% the week before. A year ago, the interest rate was 7.18%. This is the lowest average interest rate since February 12, 2023, when it was 6.12%.

Borrowing costs for 15-year fixed-rate mortgages, favored by homeowners looking to refinance their debt, also fell. The average rate fell to 5.27% from 5.47% the previous week, compared with 6.51% a year ago, Freddie Mac reported.

Mortgage rates are influenced by a variety of factors, including the bond market’s reaction to the Federal Reserve’s interest rate policy. Changes in the 10-year U.S. Treasury yield, which lenders use to price home loans, play a significant role in setting mortgage rates.

Analysts are optimistic about further rate cuts, with the Federal Reserve hinting that a rate cut could be on the table on Wednesday.

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