Weekly Mortgage Rates Decline, Following the Rate of Inflation

This article was first published on NerdWallet.com.

Mortgage rates fell in the week ending July 11, with fixed rates seeing their largest week-over-week drop since May.

The 30-year fixed-rate mortgage averaged 6.77%, down 17 basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

As inflation cools, so should interest rates

On July 11, the Bureau of Labor Statistics released an encouraging consumer price index (CPI) report, which measures the changes in price of consumer goods and services. This key indicator of the rate of inflation is something that the Federal Reserve takes into serious consideration when determining what to do about interest rates.

Throughout 2024, the Fed has been repeating some version of the same message: When inflation gets better, we can talk about cutting rates. Much to the chagrin of prospective home buyers, the Fed has consistently elected to hold rates steady throughout the year. This has kept mortgage rates elevated as home prices have continued to...