Average U.S. 30-year mortgage rate eased to 6.63% this week from 6.72% last week, offering relief to prospective homebuyers contending with persistently high borrowing costs. The 15-year fixed rate, often chosen by borrowers refinancing, also fell to 5.75% from 5.85% a week earlier. A year ago the averages were about 6.47% for 30-year loans and 5.63% for 15-year loans.
This marks the third consecutive week of declines and brings the 30-year rate close to the year’s low of roughly 6.62% set in April, though rates remain well below the mid-January peak near 7.04%. Elevated borrowing costs since early 2022 have kept the housing market subdued, with last year’s sales hitting their weakest level in nearly three decades.
Mortgage rates are driven by several forces, chief among them the 10-year Treasury yield, which lenders use as a pricing benchmark. The 10-year yield was near 4.23% midday Thursday, little changed from the previous session but lower than levels seen before a recent weaker-than-expected jobs report. That jobs report has led markets to reassess the Federal Reserve’s path on interest rates; after a recent decision to hold the policy rate steady, the Fed signaled it does not expect an immediate cut, citing inflation above target and a balanced labor market. Still, market traders have begun pricing in a possible rate cut sooner than previously expected, and political pressure for easier policy has been publicly expressed.
Economists warn there are competing forces at play: a softer economy could push mortgage rates lower, while the risk of rising inflation—potentially heightened by trade policies that could raise consumer prices—could keep rates elevated. For buyers, a moderate pullback in rates, combined with increased inventory in many metropolitan areas, has prompted sellers in some markets to reduce asking prices compared with a year ago, improving affordability for those ready to act.
Looking ahead, most forecasts expect the average 30-year rate to remain above 6% through the year, with projections centering around the mid-6% range by year-end.
Additional comments and context:
– Why this matters: Even small moves in the 30-year rate materially change monthly payments and overall borrowing costs. A tenth of a percentage point can translate into hundreds of dollars annually for typical mortgage balances.
– How rates move: Mortgage pricing tracks longer-term Treasury yields and reflects investor expectations for growth and inflation as well as central bank policy. Economic reports—especially on jobs and inflation—are major short-term drivers.
– Practical takeaways for consumers: If you’re shopping for a home or refinancing, consider getting preapproved now to lock in current pricing, compare offers from multiple lenders, and assess whether a shorter-term loan or different rate structure better fits your goals.
– Market outlook: Lower rates could prompt more buyers to enter the market, reducing available inventory and potentially pushing home prices upward in some areas. Conversely, persistent inflation or a stronger-than-expected economy could reverse recent declines in borrowing costs.
Short summary:
Mortgage rates have fallen for three straight weeks, with the 30-year average dipping to 6.63% and the 15-year to 5.75%. The move gives buyers some breathing room but rates remain elevated compared with pre-pandemic lows. Future direction will hinge on economic data, inflation trends, and central bank policy decisions.
Hopeful angle:
For buyers who have been sidelined by higher rates, this pullback—together with rising inventory in several cities—creates a better window to find homes and negotiate prices. Even modest declines in rates can make homeownership attainable for more households, and increased competition among lenders may yield attractive offers for well-prepared buyers.