Weekly Mortgage Rates Ease Downward as Lenders Anticipate Fed Cuts

This article was first published on NerdWallet.com.

Mortgage rates mostly drifted downward throughout July, and that trend continued the week ending Aug. 1.

The 30-year fixed-rate mortgage averaged 6.6%, down nine 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.

Anticipation of the Federal Reserve shifting into a rate-cutting phase has led mortgage lenders to soften rates, giving us the lowest weekly average for the 30-year fixed rate since early February.

No Fed rate cut yet

Yesterday, as predicted, the Federal Reserve held the federal funds rate steady. That short-term lending rate has now been at the same level for a solid year, as the Fed's final hike of that cycle was at last year's July meeting.

But there's considerable optimism that the Fed will move into a rate-cutting cycle beginning with their next meeting on Sept. 17-18. Though Chair Jerome Powell was characteristically cautious in prepared remarks following the meeting, he hinted strongly that cuts could come soon.

“We have made no decisions about future meetings, and that includes the September meeting,” Powell told reporters. But he did note that "a...