A single percentage point change in mortgage rates may not seem like much, but it can mean thousands of dollars in savings per year for the average U.S. homebuyer.
Mortgage rates were already falling ahead of the expected Federal Reserve rate cut. The average 30-year fixed-rate mortgage rate fell to 6.20% last week, the lowest since February 2023.
Sean Grzebin, head of retail lending at Chase Home Lending, told CNN he is already seeing an increase in demand for homes due to recent interest rate cuts.
“Due to optimism about mortgage rates, there has been significantly more activity than we would normally see at this time of year,” he said.
Grzebin said comments from Fed Chairman Jerome Powell will likely influence whether mortgage rates fall further.
“If the Fed is more cautious, I think interest rates will settle at current levels,” he said. “If it looks like there will be more cuts than previously announced, I think mortgage rates will have a greater impact.”
Although the Fed does not directly set mortgage rates, its actions affect borrowing costs across the economy.
