Homeownership Becomes More Affordable Following a Three-Week Decline in Mortgage Rates, which had Previously Surged in May
Revised Article:
Mortgage Rates Take a Dive After May Spike - Here's What You Need to Know
After peaking in mid-May due to market reactions to President Trump's proposed tax bill, mortgage rates have been on a rollercoaster ride. Here's the latest update on the changes:
As of June 17, the average 30-year fixed-rate mortgage has dropped by 21 basis points since May 23, settling at 6.91%. This happened after a weekly high of 7.12% in May. Despite this decrease, rates are still higher than they were last fall. In September 2024, for instance, the 30-year average dipped as low as 5.89%.
Other loan types have also seen a decline. For instance, 15-year rates have dropped by 14 basis points, hitting a 5.96% average. Jumbo 30-year loans have slipped by a substantial 20 basis points, landing at a 6.90% average.
Let's break it down further:
- A new $350,000 loan with a 30-year term would mean monthly payments of around $2,307 today, a $50 decrease from the May spike. Over a year, that equates to approximately $600 in savings.
If you're considering refinancing, we provide daily updates on the national average refi rate, as well as state-by-state refi averages.
In mid-May, mortgage rates jumped as the bond market reacted to the prospect of President Trump's tax bill gaining traction in Congress. Economists had warned that the bill could potentially widen the federal deficit due to extended tax cuts and increased long-term government spending. This possibility led to a surge in 10-year Treasury yields, which in turn triggered a rise in mortgage rates.
However, in the three weeks following this surge, rates have generally been on the decline for most new purchase loan types, reaching or nearing six-week lows.
Source: Zillow Mortgage API data, assuming an LTV ratio of 80% and an applicant credit score of 680-739.
Interested in refinancing? We offer daily updates on refi rates across various loan types and States.
[1] Bankrate - https://www.bankrate.com/mortgages/[2] Fortune - https://fortune.com/[3] Zillow (via FingerLakes1) - https://www.zillow.com/mortgage-rates/
In the context of personal-finance and finance, the decline in mortgage rates could potentially lower the cost of defi-based personal loans, as the rates for 30-year fixed-rate mortgages have dropped by 21 basis points since May 23, and 15-year rates have decreased by 14 basis points. Furthermore, with the increased savings from lower mortgage payments, individuals might have more funds to invest in Initial Coin Offerings (ICO) or buy tokens in the blockchain market.