Mortgage rates are falling, but it’s still hard to buy a home

Mortgage rates in the US have dropped to 6.47% for a 30-year fixed mortgage, the lowest in over a year, according to Freddie Mac. This is down from 6.73% last week and 6.96% a year ago.

Mortgage rates which usually follow the 10-year Treasury yield, which changes based on the economy’s outlook. Recent fears of a slowdown in the American economy caused Treasury yields to fall, which, in turn, influenced mortgage rates.

Many homeowners are taking advantage of the lower rates to refinance their mortgages, with refinancing applications jumping 16% last week, according to the Mortgage Bankers Association.

Refinancing is when you get a new mortgage to replace the one you already have, usually to get a better deal.

However, buying a home remains challenging due to low housing inventory, which despite increasing is still below average. This low inventory could continue to make home purchases difficult unless more houses become available.