Where have mortgage rates fallen the most?

The typical cost to borrow funds to buy a home in the U.S. hit its lowest point so far this year, after Federal Reserve officials chopped its benchmark interest rate for the first time in nine months.

As of Thursday, Freddie Mac’s national weekly average interest rate for a 30-year, fixed-rate loan had slid 9 basis points compared to the prior week, to 6.26 percent. However, the daily average on Thursday had ticked up by 10 basis points from the day before, according to Investopedia. 

The Fed announced its move to cut rates on Wednesday. The market, however, likely had already anticipated the move. What’s more, Fed cuts don’t always trigger a drop in 30-year rates.

“A rate cut isn’t an automatic path to cheaper 30‑year money,” said Sam Chandan, a real estate economist at New York University, said in an email. “Long‑term yields can rise if investors demand higher returns for tying up cash longer.”

At the state level as well, average rates rose a bit after the Fed’s decision compared to a couple of days prior.

Still, the anticipation of a cut — Fed Chair Jerome Powell had hinted at one in August — led every state’s average rate to drop over the past two months, with one state — Missouri — emerging as the clear winner.

Missouri’s average rate fell the most in the country during this time frame, by 5.05 percent, to 6.58 percent, a figure shared with South Dakota, Nebraska, Idaho, Washington and Indiana. The Real Deal analyzed average daily interest rates, sourced from Investopedia, for a 30-year loan as of July 14 and Thursday, the day after the Fed meeting.

The state with the highest average borrowing cost, of 6.7 percent, on Thursday was Hawaii. The states with the lowest were New York and North Carolina, which each notched an average rate of 6.5 percent.

New York’s average rate declined by 2.84 percent from July 14 to Thursday, marking the smallest decrease among the states.

The year kicked off with rates near or above 7 percent, triggering a drop in mortgage applications for new home purchases. Freddie Mac’s average weekly U.S. mortgage rate began to decline in July. 

At its meeting on Wednesday, Federal Reserve officials followed expectations and lowered the federal funds rate by a quarter percentage point, though President Donald Trump wanted a bigger cut. The central bankers also signalled that there could be further drops on the horizon.

“If the labor market continues to cool and inflation keeps easing, the 10‑year can drift lower and mortgages can edge down, but the current data and fiscal position of the country don’t point to a major decline,” Chandan said. “If growth runs hotter or bond sales stay heavy, progress will be slower and those long rates could easily rise.”

Many in the real estate industry had been hoping for lower rates to rev up both the residential and commercial sectors. Homeowners hoping to refinance mortgages they recently took out with rates above 6.5 percent have also had to delay their plans.