Buyers face decision as mortgage rates hit 7-week low
Mortgage rates have decreased, according to Freddie Mac. The average 30-year fixed mortgage rate is down six basis points to 6.43% - a seven-week low.
The average 15-year FRM has declined by five basis points to 5.79%.
I may not be buying a home right now, but as a real estate journalist, I took a huge sigh of relief along with all of the hopeful homebuyers out there when I saw that rates had fallen. It's encouraging to finally be able to report on good news for rates and affordability.
So, now that the popular 30-year mortgage rate has inched farther away from 6.5%, what should potential buyers do next? Wait for rates to continue falling, or get the ball rolling on your home-buying journey?
Mortgage rates respond to Iran war and Federal Reserve
The U.S. and Iran are making progress toward a peace agreement, and oil prices have decreased over the last week. Brent crude oil now sits at just a little over $70, per Business Insider.
Because I've been tracking mortgage rates since the conflict in the Middle East began in late February (and long before that in my career), I knew these improvements could be good news for mortgage rates. I still wasn't convinced that rates would decrease the week of July 3, though.
Why? Because of the Federal Reserve.
After the June 16-17 FOMC meeting, many experts predicted a federal funds rate hike was in the Fed's near future, not a cut. The Bank of America even projected three 25-basis-point rate hikes in 2026.
Related: Redfin sees shift in housing market, home prices
Sentiment about the Federal Reserve was one reason Freddie Mac mortgage rates remained flat the week of June 25.
I also monitored daily rate changes from Mortgage News Daily. These were volatile throughout the week, which made me a little nervous.
I was cautiously optimistic but fully prepared for rates to be stagnant again the week of July 3. Thankfully, average mortgage rates did end up falling a bit.
"Markets have digested the Fed's more hawkish stance better than expected," Jeff DerGurahian, chief investment officer and head economist at loanDepot, said in statement.
"That's bringing some relief after fears that rates could push higher following the Fed's last meeting," he continued.
Will mortgage rates continue to decrease?
Homebuyers have seen mortgage rates tick down here and there in 2026, only to pop back up again a week or two later.
Even though we're all happy that mortgage rates have decreased, the big question is: Will mortgage rates continue to go down?
Will they fall closer to 6%?
Now that the U.S. is moving toward peace with Iran and the market is taking the Fed's attitude in stride, DerGurahian said the main thing to watch is news regarding jobs. In general, mortgage rates tend to decline when jobs data is weaker.
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The June jobs report, released by the Bureau of Labor Statistics on July 2, showed that payrolls came in well under projections. The revised data for April and May also lowered the number of jobs on record.
Private payrolls increased by 98,000 in June, according to the ADP National Employment Report, released on July 1. This number was also lower than expected.
If jobs data continues to weaken, mortgage rates could keep trending downward. At least for a few weeks.
Beyond that, it's hard to say what rates will do. The next Federal Reserve meeting is July 28-29. Although experts don't predict that the Fed will hike its rate in July, any messaging from Chairman Kevin Warsh at the meeting could sway home loan rates in one direction or the other.
Tips for homebuyers now that rates are down
"For homebuyers, the summer may be shaping up to be better than expected," said DerGurahian. "Now, with oil lower and rates beginning to ease, there is a better chance that we could see rates move toward the low-6% range if the jobs data softens."
This leads to another classic question when mortgage rates decrease: Should you buy now while rates are down, or should you wait for them to fall even more significantly?
Everyone's situation is different. But now that I've covered mortgage rates for about six years, I've learned some general rules of thumb and tips for people who are concerned about rates.
- Don't wait for lower rates to buy. Timing the real estate market is risky, and it rarely works out the way you want. Experts make their best predictions about what mortgage rates will do next, but economic or political circumstances can change unexpectedly. There's no guarantee that rates will continue to decrease.
- Begin the home-buying process. If you're otherwise ready to buy, start shopping for houses now. If interest rates do go down, they could be even lower by the time you're ready to lock in a rate.
- Look into a rate float-down program. Some mortgage lenders let you lock in your rate for a certain amount of time (usually 30 or 60 days), but with the option of a rate float-down. If market rates decrease before your rate lock expires, you can ask your lender for a lower rate in exchange for a fee. Navy Federal Credit Union and Newrez are two lenders offering this type of program.
Related: Why first-time homebuyers face a stacked deck right now
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This story was originally published July 2, 2026 at 5:33 PM.