Average rate on a 30-year mortgage drops to 6.77%, lowest level since March
The average rate on a 30-year mortgage dropped this week to a four-month low, a welcome decline in borrowing costs for prospective homebuyers grappling with the challenge of record-high home prices and a dearth of properties on the market
LOS ANGELES — The average rate on a 30-year mortgage dropped this week to a four-month low, a welcome decline in borrowing costs for prospective homebuyers grappling with the challenge of record-high home prices and a dearth of properties on the market.
The rate fell to 6.77% from 6.89% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.78%.
This is the second straight weekly drop in the average rate. It's now at the lowest level since mid March, when it averaged 6.74%.
“Mortgage rates are headed in the right direction and the economy remains resilient, two positive incremental signs for the housing market,” said Sam Khater, Freddie Mac’s chief economist.
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.
After jumping to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has mostly hovered around 7% this year — more than double what it was just three years ago.
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers this year, extending the nation's housing slump into its third year. Sales of previously occupied U.S. homes fell in May for the third month in a row, and indications are that June saw a pullback as well.
Mortgage rates have eased recently as signs of cooling inflation have
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