Market Update: Rates Drop to Lowest Levels of the Year After Fed Announcement

Blog posted On August 01, 2024

We rounded out the last few days in July with a nice downward trend mortgage rates. Though we’re still waiting for some key employment reports to come out tomorrow, this week has been full of good news for rates and housing. Let’s dive in!

Home price increases are moderating

The 20-city Case-Shiller home price index climbed 0.3% month-over-month to hit a fresh high in May. Annually, the index climbed 6.8%. This was a deceleration from the previous month’s 7.3% increase. The Federal Housing Finance Agency (FHFA) house price index reported that home prices were actually flat in May. “The slowdown in U.S. house price appreciation continued in May amid a slight rise in both mortgage rates and housing inventory,” the agency said.

To wait or not to wait for price/rate drops…

So, should you wait for prices to moderate more? Maybe not, according to S&P. “The waiting game for the possibility of favorable changes in lending rates [could be] costly … as home prices march forward,” said Brian D. Luke, head of commodities, real estate and digital assets at S&P Dow Jones Indices. Additionally, once rates start declining more, there will be increased competition, which in turn is likely to push prices higher. 

Higher inventory pushes pending sales higher

Pending home sales were more than double what economists had expected in June. After declining 1.9% in May, experts were predicting a 1.4% increase in June. However, due to an increasing number of available homes, pending sales surged 4.8% month-over-month. It’s likely that more homes are on the market due to the recent downward trend in rates. Homeowners who are looking to move are seeing a window of opportunity, benefitting buyers and sellers alike. 

Average rates dive to lowest levels in a long time after Fed Announcement

No, the Fed did NOT cut rates yesterday. Nevertheless, mortgage rates trended lower. Why? The announcement and subsequent press conference from Fed Chairman Jerome Powell hinted at a rate cut in September. Long story short, rates trended lower due to the overall expectation for a future rate cut from the Fed. As a result, the average 30-year mortgage rate officially dropped to its lowest level since late 2023, according to Mortgage News Daily’s rate index. However, it’s extremely close to the levels we saw in February. Either way rates are trending near the lowest levels in at least 6 months.

If you want to take advantage of today’s rates, ask about our rate lock options.

Sources: MarketWatch, MarketWatch, Mortgage News Daily,