Average long-term US mortgage rate eases to 6.3%, back to its lowest level in about a year
The average rate on a 30-year U.S. mortgage edged lower this week, returning to its lowest level in about a year.
The average long-term mortgage rate slipped to 6.3% from 6.34% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.32%.
The modest drop brings the average rate back to where it was two weeks ago, after a string of declines brought down home loan borrowing costs to their lowest since early October 2024.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. The average rate dropped to 5.53% from 5.55% last week. A year ago, it was 5.41%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The 10-year yield was at 4.13% at midday Thursday, up from around 4.09% the same time last week. The yield has been trending higher since it slid to around 4.02% on Sept. 11.
In late July, mortgage rates started declining in the lead-up to the Federal Reserve’s widely anticipated decision last month to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market.
However, Fed Chair Jerome Powell has since signaled a cautious approach to future interest rate cuts. That’s in sharp contrast with other members of the Fed’s rate-setting committee, particularly those who were appointed by President Donald Trump, who are pushing for faster cuts.
Even if the Fed opts to cut its short-term rate further that doesn’t necessarily mean mortgage rates will keep declining. Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates ticked higher, eventually reaching just above 7% in January this year.