The average rate on the benchmark 30-year home loan fell for the second week in a row, positive news for prospective homebuyers after rates touched a 22-year high just last month. The latest decline brought the average rate on a 30-year mortgage down to 7.5% from 7.76% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.08%.
Quick Read
- The average rate on a 30-year home loan has decreased for the second consecutive week.
- The rate fell from 7.76% to 7.5%, offering positive news for potential homebuyers.
- A year ago, the 30-year mortgage rate averaged 7.08%.
- Rising mortgage rates can increase monthly costs for borrowers and make the housing market less affordable.
- Higher rates also deter homeowners with lower-rate mortgages from selling their homes.
- Sales of previously occupied U.S. homes have been impacted by rising rates and home prices.
- The current average rate on a 30-year mortgage is the lowest since early October when it was 7.49%.
- Borrowing costs for 15-year fixed-rate mortgages have also decreased.
- The average rate on 15-year mortgages fell from 7.03% to 6.81%.
- A year ago, the 15-year mortgage rate averaged 6.38%.
- Mortgage rates exceeded 6% in September 2022 and remained above that level since, reaching a high of 7.79% two weeks ago.
- These rate increases are linked to the rise in the 10-year Treasury yield, which influences loan pricing.
- Factors such as inflation expectations, global demand for U.S. Treasurys, and Federal Reserve actions impact home loan rates.
- The 10-year Treasury yield had surged to over 5% recently but has eased since the Federal Reserve chose not to raise its key interest rate.
- Currently, the 10-year Treasury yield is at 4.54%, compared to about 3.50% in May and 0.50% during the early stages of the pandemic.
The Associated Press has the story:
Average 30-year US mortgage rate falls to 7.5% in 2nd-straight weekly drop
Newslooks- LOS ANGELES (AP)
The average rate on the benchmark 30-year home loan fell for the second week in a row, positive news for prospective homebuyers after rates touched a 22-year high just last month.
The latest decline brought the average rate on a 30-year mortgage down to 7.5% from 7.76% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.08%.
As mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in far lower rates two years ago, when they were around 3%, from selling.
The combination of rising mortgage rates and home prices have weighed on sales of previously occupied U.S. homes, which fell in September for the fourth month in a row, grinding to their slowest pace in more than a decade.
This average rate on a 30-year mortgage is now at the lowest level it’s been since the first week of October, when it was 7.49%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, also declined, with the average rate falling to 6.81% from 7.03% last week. A year ago, it averaged 6.38%, Freddie Mac said.
The average rate on a 30-year home loan climbed above 6% in September 2022 and has remained above that threshold since, reaching 7.79% two weeks ago. That was the highest average on record going back to late 2000.
Rates have risen along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
The yield on the 10-year Treasury had been rising in recent weeks, jumping to more than 5% two weeks ago, its highest level since 2007, as bond traders responded to signals from the Federal Reserve that the central bank might have to keep its key short-term rate higher for longer in order to tame inflation.
But long-term bond yields have been easing since last week, when the Federal Reserve opted against raising its main interest rate for a second straight policy meeting.
The yield was at 4.54% in midday trading Thursday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.
