There is more good news for both home sellers and home buyers. In the week leading up to the Fourth of July holiday weekend, mortgage rates declined. This was unexpected by many, but it is certainly welcome news for a market that has been somewhat frozen while waiting for signs that mortgage rates would begin to fall.
One thing that has become very apparent is that mortgage rates have recently been more closely tied to oil prices than to most other economic indicators.
My advice is this: if you have been waiting for mortgage rates to drop before pulling the trigger on a home purchase, this may be your opportunity. I wouldn't expect any substantial rate reductions in the near future.
Here is an article published last week by Realtor.com.
Mortgage rates dropped substantially Thursday, as falling oil prices and the tentative U.S.-Iran peace deal pushed long-term borrowing rates lower.
The average rate on 30-year fixed home loans fell to 6.43% for the week ending July 2, down 6 basis points from 6.49% the previous week, according to Freddie Mac. For perspective, rates averaged 6.67% during the same period in 2025.
It marked the biggest weekly decline in mortgage rates since late April, and took average rates to their lowest level since May 14.
"The 30-year fixed-rate mortgage eased slightly this week, averaging 6.43%,” says Sam Khater, Freddie Mac's chief economist. "With rates at a seven-week low and purchase demand continuing to edge higher, it's an encouraging sign as prospective homebuyers respond to modest improvements in affordability."
Easing oil prices have been the key factor for mortgage rates, although new labor market data in recent days has influenced the key 10-year Treasury yield as well. A stronger-than-expected job openings report sent yields higher this week, while the key monthly reading on U.S. job growth showed weak hiring, partly reversing the trend.
"For most of Freddie’s survey window, yields sat near their lowest levels since early May as oil prices kept retreating and Iran ceasefire talks progressed, leaving room for this week’s average to land below last week’s mark despite Tuesday’s late bump," says Realtor.com® economist intern Glen Morgenstern.
The Federal Reserve has held rates steady since December but has turned notably more hawkish this year as new Chair Kevin Warsh and the Federal Open Market Committee (FOMC) focused their attention on combating higher inflation.
For buyers, this environment of continued relative stability comes as good news after a volatile spring, and Realtor.com June housing data released Wednesday shows that shoppers are adapting to the current rate reality rather than waiting it out, according to Morgenstern.
As reflected in the report, listing prices were down 2.5% year over year in June, the steepest annual decline in the data series since 2017, while pending sales grew for a seventh straight month.
While April’s Case-Shiller index still shows nominal price growth, it trailed inflation for an 11th-straight month, meaning that even as sticker prices rise, the real price of a home for buyers is going down relative to other goods and services.
Have An Awesome Week!
Haas Real Estate Team
541.349.2620