Mortgage rates see biggest one-day drop in over a year

Mortgage Rates and Market Reaction - The average rate on the 30-year fixed mortgage decreased by 16 basis points to 6.29%, marking the lowest rate since October 3 and the largest one-day drop since August 2024 [1][2] - This drop in mortgage rates is a significant shift from May when rates peaked at 7.08%, providing potential buyers with more affordable monthly payments [3] Impact on Homebuyers - For a $450,000 home purchase with a 20% down payment, the monthly payment at 7% would be $2,395, while at 6.29%, it would be $2,226, resulting in a monthly savings of $169 [3][4] - The reduction in monthly payments can influence not only affordability but also the qualification for mortgages [4] Stock Market Response - Homebuilder stocks, including Lennar, DR Horton, and Pulte, experienced a favorable reaction with an approximate increase of 3% [4] - The homebuilding ETF ITB has seen a significant rise of nearly 13% over the past month as mortgage rates have gradually decreased [4]