Mortgage rates moved slightly downward this week, hitting new year-to-date lows as financial markets largely shrugged off President Trump’s latest efforts to exert control over the Federal Reserve Board.
The average 30-year fixed-rate mortgage fell to 6.56% this week, from 6.58% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was unchanged at 5.69%.
Rates followed the 10-year Treasury yield lower after Federal Reserve Chairman Jerome Powell highlighted concerns about labor market weakness in a speech last Friday and kept the door open for a rate cut in September. The Fed doesn’t directly control mortgage rates, but rates do react based on expectations about the direction of future monetary policy.
Learn more: How does the 10-year Treasury yield affect mortgage rates?
Traders currently see 87% odds of a 25-basis-point rate cut at the Fed’s September meeting.
For now, mortgage rates have shrugged off Trump’s unprecedented move to fire Federal Reserve Governor Lisa Cook, citing mortgage fraud allegations. Cook hasn’t been charged with a crime and has sued over the attempted firing.
Trump has been battling with the Fed, which is independent from Congress and the White House, for months. He’s repeatedly criticized Powell over his decision to hold interest rates steady following a series of rate cuts last year and has claimed that there is “virtually no inflation,” though inflation continues to run above the Fed’s 2% target. Trump has also said that today’s high interest rates are hurting the housing industry and have prevented people from getting mortgages.
Even as the president escalates the fight, financial markets haven’t reacted much in response, helping mortgage rates continue to trend down.
Mortgage application trends have been mixed despite recent lower rates. Applications to purchase a home were up 2% through Friday compared to a week earlier, according to the Mortgage Bankers Association. Refinancings, meanwhile, dropped 4%.
Home contract signings dipped 0.4% in July compared to a month earlier, according to National Association of Realtors data released on Thursday. They’re up 0.7% from July 2024, but remain at relatively depressed levels as would-be buyers struggle with affordability.
Learn more: Where and how to find the lowest mortgage rates right now
“Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant,” NAR Chief Economist Lawrence Yun said in a statement.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
Sign up for the Mind Your Money newsletter
Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more
Read the latest financial and business news from Yahoo Finance
