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**Summary:**

Mortgage rates have fallen to a ten-month low, with the 30-year fixed rate averaging 6.5%, according to Freddie Mac. This decline is the lowest since October 2024 and is prompting more homeowners to consider refinancing. However, despite the lower rates, housing affordability remains a significant issue, with only 28% of homes on the market being affordable for the average American household due to rising interest rates eroding buying power since 2019.

**News Article:**

**Mortgage Rates Hit 10-Month Low, but Housing Affordability Still a Concern**

**New York, NY -** Mortgage rates have dipped to their lowest levels since October 2024, according to Freddie Mac’s latest Primary Mortgage Market Survey released Thursday. The average rate on a 30-year fixed mortgage fell to 6.5%, down from 6.56% the previous week. This is the lowest it has been since October 17, 2024, when it averaged 6.44%.

“Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike,” said Sam Khater, Freddie Mac’s chief economist. “As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding.” The share of mortgage applications for refinancing has reached nearly 47%, the highest since October.

The average rate on a 15-year fixed mortgage also saw a decrease, falling to 5.6% from 5.69% the week prior.

However, despite this welcome news, housing affordability remains a major obstacle for many Americans. According to a recent Realtor.com report, only 28% of homes on the U.S. market are affordable for the average household.

Realtor.com Chief Economist Danielle Hale points to higher mortgage rates as a primary factor eroding buying power. “Even as incomes grow, higher interest rates have eroded the real-world purchasing power of the typical American household,” Hale stated. This forces potential buyers to lower their expectations, look at smaller homes, move farther away, or delay homeownership altogether.

As of August, the maximum affordable home price for a median-income household has fallen to $298,000, down from $325,000 in 2019, reflecting a decrease in buying power by nearly $30,000 nationally, despite a 15.7% increase in median income over the same period. The housing affordability crisis is a problem that Treasury is aware of and plans to address this fall.

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