Mortgage rates fall to multi-month low, but housing rebound unlikely

Mortgage rates have eased to the lowest levels seen in months, lifting some purchasing power for would-be buyers and nudging homeowners toward refinancing or selling, but experts say the improvement is unlikely to unlock a broad revival in the U.S. housing market on its own. The benchmark 30-year fixed-rate mortgage has hovered in the mid-to-high 6% range, a far cry from the sub-3% pandemic-era rates that lured buyers into a frenzied market. While the decline offers relief, affordability remains hampered by high home prices and a persistent shortage of homes for sale.

Recent data show the 30-year rate around 6.58% to 6.67%, the lowest in months, with the 15-year fixed-rate mortgage slipping to about 5.71%. The declines have translated into a mixed picture for demand: refinance activity surged to multi-month highs, while purchase applications rose only modestly. In the same period, interest in adjustable-rate mortgages also climbed, reflecting borrowers’ attempt to navigate a rate environment that remains above historical norms but is more favorable than at the start of the year.

Industry observers say the market’s next move will depend not only on rate changes but also on...