Mortgage rates experience ‘summer swoon’ as Fed maintains status quo

Benchmark mortgage rates continued their downward trajectory over the past week, following Federal Reserve Chair Jerome Powell’s indications to lawmakers that the central bank wasn’t changing up its strategy anytime soon.

The 30-year fixed-rate mortgage averaged 2.88% for the week ending July 15, down two basis points from the previous week, Freddie Mac FMCC, +0.42% reported Thursday. Since peaking at 3.18% in April, the rate on the 30-year mortgage has now fallen 30 basis points, or nearly one-third of 1%.

The 15-year fixed-rate mortgage increased two basis points to an average of 2.22%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell by five basis points to an average of 2.47%.

“The summer swoon in mortgage rates continues as the 30-year fixed-rate mortgage fell for the third consecutive week,” Freddie Mac chief economist Sam Khater said in the report. “While this decline is not large, it provides modest relief to borrowers who are purchasing in a market with strong home appreciation and scant inventory.”

The movement in mortgage rates over the past week confirmed that the Fed is very much in the driver’s seat when it comes to the trajectory of interest rates these days. While testifying before the U.S. Senate, Powell again reiterated his stance that the current spate of inflation would be temporary, indicating that the Fed is set to maintain its current approach on monetary easing.