Home loan borrowing costs eased again this week as the average rate on a 30-year mortgage declined to its lowest level since early April. The rate fell to 6.87% from 6.95% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.67%.
Quick Read
- Mortgage Rate Decline: The average long-term U.S. mortgage rate fell again this week, reaching the lowest level since early April.
- Current Rates: The average rate on a 30-year mortgage declined to 6.87%, down from 6.95% last week. A year ago, the rate was 6.67%.
- 15-Year Mortgage Rates: The average rate on 15-year fixed-rate mortgages also fell, dropping to 6.13% from 6.17% last week. A year ago, it was 6.03%.
- Economic Influence: The decline follows signs of cooling inflation and market expectations of a future Federal Reserve rate cut.
- Factors Affecting Rates: Home loan rates are influenced by the bond market’s reaction to the Federal Reserve’s interest rate policy and the 10-year Treasury yield.
- Economic Data Impact: Recent economic data showing slower growth has helped ease yields, potentially keeping inflationary pressures in check.
- Federal Reserve Signals: Federal Reserve officials indicated that inflation is moving toward their 2% target and signaled a potential rate cut later this year, down from the previously projected three cuts in 2024.
- Homebuying Impact: Despite the decline, the average rate on a 30-year mortgage remains near a two-decade high, discouraging many potential homebuyers and contributing to a lackluster spring homebuying season. Sales of previously occupied homes fell in March and April due to rising borrowing costs and prices.
The Associated Press has the story:
Average long-term US mortgage rate falls again, easing to lowest level since April
Newslooks- LOS ANGELES (AP) —
Home loan borrowing costs eased again this week as the average rate on a 30-year mortgage declined to its lowest level since early April. The rate fell to 6.87% from 6.95% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.67%.
This is the third straight weekly decline in the average rate, which has mostly hovered around 7% since April. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week, lowering the average rate to 6.13% from 6.17% last week. A year ago, it averaged 6.03%, Freddie Mac said.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” said Sam Khater, Freddie Mac’s chief economist.
Home loan rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields have mostly eased recently following some economic data showing slower growth, which could help keep a lid on inflationary pressures and convince the Federal Reserve to begin lowering its main interest rate from its highest level in more than 20 years.
Federal Reserve officials said last week that inflation has fallen further toward their target level of 2% in recent months and signaled that they expect to cut their benchmark interest rate once this year. The central bank had previously projected as many as three cuts in 2024.
Until the Fed begins lowering its short-term rate, long-term mortgage rates are unlikely to ease significantly, economists say.
The average rate on a 30-year mortgage remains near a two-decade high, discouraging many would-be homebuyers. The elevated rates contributed to a lackluster spring homebuying season. Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising borrowing costs and prices.
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