What's happening with mortgage rates?

KEY TAKEAWAYS

Mortgage rates remained stable on Thursday, decreasing by 0.02 percentage points to 6.72%.
It comes a day after the Federal Reserve declined to cut interest rates despite pressure from President Donald Trump.
Real estate site Zillow warned current rates and prices are unlikely to change significantly without an economic slowdown.

SALT LAKE CITY — Mortgage rates aren't moving much.

A day after the Federal Reserve declined to cut interest rates despite pressure from President Donald Trump, the Federal Home Loan Mortgage Corporation, known as Freddie Mac, reported the average 30-year fixed-rate mortgage slid to 6.72% for the week ending July 31.

That's down just 0.02 percentage points from the prior week, but the Freddie Mac site suggested in a Thursday post updating the weekly average that there's good news ahead for the real estate market.

"The 30-year fixed-rate mortgage showed little movement, remaining within the same narrow range for the fourth consecutive week. Continued economic growth, along with moderating house prices and rising inventory, bodes well for buyers and sellers alike," the post said.

Mortgage News Daily's daily index had a 30-year fixed-rate mortgage at 6.75% Thursday, unchanged from Wednesday, when the site described mortgage rates as shifting "sideways to slightly lower."

Citing the potential of a larger impact on rates from other sources, Mortgage News Daily's Matthew Graham posted Wednesday the Fed's decision "did nothing to change the bigger picture although it did result in lower expectations for Fed rate cuts by the end of the year."

Fed Chairman Jerome Powell speaks at a press conference, shown on TV on the floor at the New York Stock Exchange in New York, Wednesday. Mortgage rates slipped slightly a day after the Fed held interest rates steady. (Photo: Seth Wenig, Associated Press)

How low would mortgage rates need to go for homes to be affordable?

A recent analysis by the real estate site Zillow found that mortgage rates would have to drop dramatically, to 4.43%, to make a typically priced home in the U.S. affordable to a median-income family.

In the Salt Lake City area, higher housing prices mean that rate would have to go even lower, to 3.12%, to make a purchase affordable to a typical buyer. As of the end of June, the median list price for a Salt Lake City home was $596,317, Zillow said.

But even with a 0% interest rate mortgage, a typical house would still be out of reach for median-income buyers in some parts of the country, including Los Angeles, Miami, New York, San Diego, San Francisco and San Jose.

At the other end of the scale, Zillow calculated that mortgage rates could jump to 8.9%, and median-income buyers in Pittsburgh could still afford a home. The same is true at current mortgage rates in a number of largely Midwestern and Southern cities.

Big changes to mortgage rates are "currently unrealistic," Zillow noted.

And buyers waiting for mortgage rates and prices to tumble are "in for a rude awakening," the site warned, since "that kind of correction in house prices won't happen without a serious slowdown in economic growth and income growth, and a rise in the unemployment rate."

The Key Takeaways for this article were generated with the assistance of large language models and reviewed by our editorial team. The article, itself, is solely human-written.