Rates Cool To 6.77%

Mortgage rates went down last week, but jittery consumers are still holding back over economic fears.

Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.77%, falling from 6.81%. A year ago, they averaged 6.86%.

Fifteen-year rates declined to 5.89% from 5.96%, and are down from 6.16% last year.

“Borrowers should find comfort in the stability of mortgage rates, which have only fluctuated within a narrow 15-basis point range since mid-April. Although recent data show that home sales remain low, the resulting available inventory provides homebuyers with a wider range of options to consider when entering the market,” said Sam Khater, Freddie Mac’s Chief Economist.

But stability and improving stock have yet to translate to affordability. The national median payment applied for by purchase applicants increased to $2,211 in May.

At the same time, both current and prospective homeowners are concerned about the long-term future of their loans. Legal requests related to foreclosures are at a five-year high, according to a recent LegalShield survey. 

More than 70% of respondents said they’re worried that a potential recession and tariffs could disrupt their housing plans.

“The hard data from consumers calling lawyers matches their fears about the economy: their homes are at risk and things may get worse,” Warren Schlichting, LegalShield CEO, commented. 

May inflation data released this week revealed higher prices and slowing consumer spending.

Although emerging data suggest President Trump’s tariffs have yet to significantly impact prices, nervous consumers report anxiety about the economy.

Twenty-seven percent of US consumers feel pessimistic about their finances over the next year, according to TransUnion, up from 21% in late 2024 and the highest level since the company began tracking this metric in 2021.