The average rate on a 30-year U.S. mortgage fell for the fourth week in a row to its lowest level in more than a year.<\/p>\n
Lower mortgage rates boost homebuyers\u2019 purchasing power. They also benefit homeowners eager to refinance their current home loan to a more attractive rate.<\/p>\n
The average long-term mortgage rate dropped to 6.17% from 6.19% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.72%.<\/p>\n<\/p>\n
The last time the average rate was lower was on Oct. 3, 2024, when it was 6.12%.<\/p>\n
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. The average rate dropped to 5.41% from 5.44% last week. A year ago, it was 5.99%, Freddie Mac said.<\/p>\n
Mortgage rates are influenced by several factors<\/a>, from the Federal Reserve\u2019s interest rate policy decisions to bond market investors\u2019 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.<\/p>\n The average rate on a 30-year mortgage has remained above 6% since September 2022, the year mortgage rates began climbing from historic lows. The housing market has been in a slump ever since.<\/p>\n Sales of previously occupied U.S. homes sank last year<\/a> to their lowest level in nearly 30 years. Sales have been sluggish this year, but accelerated last month<\/a> to their fastest pace since February as mortgage rates eased.<\/p>\n Mortgage rates began declining in July in the lead-up to the Federal Reserve\u2019s decision<\/a> in September to cut its main interest rate for the first time in a year amid growing concern over the U.S. labor market<\/a>.<\/p>\n The Fed lowered its key interest rate again this week<\/a> in a bid to help boost the slowing job market<\/a>. However, Chair Jerome Powell warned that it \u201cis not a foregone conclusion\u201d that the Fed will cut again in December at its next meeting.<\/p>\n That caused the 10-year Treasury yield to climb. The yield was at 4.08% in midday trading Thursday after hovering below 4% much of the past two weeks.<\/p>\n The Fed could also pump the brakes on more rate cuts if inflation climbs further<\/a> amid the Trump administration\u2019s expanding use of tariffs<\/a>,<\/a> because lower rates can worsen inflation.<\/p>\n Bond investors demand higher returns as long as inflation remains elevated, so if inflation ticks upward that could translate into higher yields on the 10-year Treasury note, pushing up mortgage rates.<\/p>\n The central bank doesn\u2019t set mortgage rates, and even when it cuts its short-term rates that doesn\u2019t necessarily mean rates on home loans will necessarily decline.<\/p>\n Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates marched higher, eventually reaching just above 7% in January this year.<\/p>\n The pullback in rates has helped spur homeowners who bought in recent years after rates climbed above 6% to refinance their home loan to a lower rate.<\/p>\n Mortgage applications, which include loans to buy a home or refinance an existing mortgage, jumped 7.1% last week from a week earlier, according to the Mortgage Bankers Association.<\/p>\n Applications for mortgage refinance loans rose 9% and were up more than twofold versus the same week last year.<\/p>\n Even so, mortgage rates would have to drop below 6% to make refinancing an attractive option to a broader swath of homeowners. That\u2019s because about 80% of U.S. homes with a mortgage have a rate below 6% and 53% have a rate below 4%, according to Realtor.com.<\/p>\n","protected":false},"excerpt":{"rendered":"The average rate on a 30-year U.S. mortgage fell for the fourth week in a row to its…\n","protected":false},"author":2,"featured_media":261204,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[140942,28,101,2800,4665,2402,9569,15940,5412],"class_list":["post-261203","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-attractive-rate","tag-business","tag-economy","tag-federal-reserve","tag-freddie-mac","tag-inflation","tag-interest-rate","tag-mortgage-rate","tag-mortgage-rates"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/261203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=261203"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/261203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/261204"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=261203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=261203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=261203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}