By ALEX VEIGA, AP Business Writer
The average rate on a 30-year mortgage in the U.S. eased this week, though it remains close to its highest level in more than two months.
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The rate fell to 6.81% from 6.83% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.17%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.94% from 6.03% last week. It’s down from 6.44% a year ago, Freddie Mac said.
Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for future inflation.
After climbing to a just above 7% in mid-January, the average rate on a 30-year mortgage has remained above 6.62%, where it was just two weeks ago. It has risen sharply since then, reflecting volatility in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The yield, which had mostly fallen this year after climbing to around 4.8% in mid-January, spiked earlier this month to 4.5% amid a sell-off in government bonds triggered by investor anxiety over the potential fallout from the Trump administration’s ongoing trade war.
The 10-year Treasury yield was at 4.34% in midday trading Thursday, down from 4.40% late Wednesday.
Lower mortgage rates help boost homebuyers’ purchasing power, but they haven’t come down enough to encourage home shoppers at a time when real estate prices are still rising nationally, albeit more slowly.
Sales of previously occupied U.S. homes fell in March, posting the largest monthly drop since November 2022, as elevated mortgage rates dampened the start of the spring homebuying season.
Forecasts by housing economists generally called for the average rate on a 30-year mortgage to remain around 6.5% this year.
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