Average rate on 30-year mortgage eased to 6.86%, lowest level since early April
The average rate on a 30-year mortgage eased again this week, extending a welcome trend for prospective homebuyers facing record-high home prices
LOS ANGELES — The average rate on a 30-year mortgage eased again this week, extending a welcome trend for prospective homebuyers facing record-high home prices.
The rate fell to 6.86% from 6.87% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.71%.
This is the fourth straight weekly drop in the rate, which has mostly hovered around 7% this year. Home sales have been falling in recent months as the elevated rates, which can add hundreds of dollars a month in costs for borrowers, have put off many home shoppers.
Sales of previously occupied U.S. homes fell in May for the third month in a row. Sales of newly built single-family homes fell in April and May from a year earlier by 7.7% and 16.5%, respectively.
“The 30-year fixed-rate mortgage continues to trend down, hitting the lowest level in almost three months,” said Sam Khater, Freddie Mac’s chief economist. “By historical standards, the economy is in good shape, and we expect rates to continue to come down over the summer months, bringing additional homebuyers back into the market.”
Mortgage 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.
The yield, which topped 4.7% in late April, has been mostly falling 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
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