Average US Rate on a 30-year Mortgage Slips to 8-Week Low
Homebuyers Benefit from Stabilizing Mortgage Rates
The average rate on a 30-year mortgage in the United States has eased for the fifth consecutive week to its lowest level since late December, a welcome boost for prospective homebuyers in what’s traditionally the busiest time of the year for home sales. According to Freddie Mac, the average rate fell to 6.85% from 6.87% last week, with a year ago average of 6.9%.
Rates on 15-year Fixed-Rate Mortgages Also Ease
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate fell to 6.04% from 6.09% last week, with a year ago average of 6.29%.
Home Sales Slump Continues Amid High Mortgage Rates and Prices
Rising home prices and elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many prospective home shoppers on the sidelines, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase. Sales of previously occupied U.S. homes fell last year to their lowest level in nearly 30 years, extending a national home sales slump that began in 2022 as mortgage rates began to climb from their pandemic-era lows.
Stability in Mortgage Rates Boosts Homebuying Season
“This stability continues to bode well for potential buyers and sellers as we approach the spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist. The inventory of U.S. homes on the market climbed last month to its highest level since June 2020, according to data from Redfin. However, mortgage rates and prices remain an unaffordable combination for many would-be homebuyers.
Mortgage Applications Fall Despite Easing Rates
Despite the recent easing in mortgage rates, home loan applications fell 5.5% last week from the previous week to the lowest level since the start of the year, according to the Mortgage Bankers Association. “Purchase activity was higher than year-ago levels, but many prospective homebuyers are waiting for supply and affordability conditions to improve meaningfully before jumping into the market,” said Bob Broeksmit, the MBA’s CEO.
Mortgage Rates Influenced by Federal Reserve’s Interest Rate Policy
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. The latest pullback in rates echoes a decline in the 10-year Treasury yield, which lenders use as a guide for pricing home loans. The yield was at 4.79% just a few weeks ago, reflecting fears that inflation may remain stubbornly higher amid a solid U.S. economy and the potential impact of tariffs and other policies proposed by the Trump administration.
Conclusion
The average rate on a 30-year mortgage has slipped to an 8-week low, providing a welcome boost for prospective homebuyers. While mortgage rates and prices remain a challenge for many, the stability in rates is a positive sign for the homebuying season.
FAQs
* What is the current average rate on a 30-year mortgage?
The current average rate on a 30-year mortgage is 6.85%.
* What is the average rate on a 15-year fixed-rate mortgage?
The current average rate on a 15-year fixed-rate mortgage is 6.04%.
* Why are mortgage rates affected by the Federal Reserve’s interest rate policy?
Mortgage rates are influenced by how the bond market reacts to the Federal Reserve’s interest rate policy decisions, including the 10-year Treasury yield, which lenders use as a guide for pricing home loans.
