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.
Lower mortgage rates boost homebuyers’ purchasing power. They also benefit homeowners eager to refinance their current home loan to a more attractive rate.
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%.
The last time the average rate was lower was on Oct. 3, 2024, when it was 6.12%.
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.
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.
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NEW YORK (AP) — The United States is running out of pennies.
President Donald Trump’s decision to stop producing the penny earlier this year is starting to have real implications for the nation’s commerce. Merchants in multiple regions of the country have run out of pennies and are unable to produce exact change. Meanwhile, banks are unable to order fresh pennies and are rationing pennies for their customers.
One convenience store chain, Sheetz, got so desperate for pennies that it briefly ran a promotion offering a free soda to customers who bring in 100 pennies. Another retailer says the lack of pennies will end up costing it millions this year, because of the need to round down to avoid lawsuits.
“It’s a chunk of change,” said Dylan Jeon, senior director of government relations with the National Retail Federation.
FILE – A lone penny is illuminated in a bin of completed pennies at the U.S. Mint in Denver on Aug. 15, 2007. (AP Photo/David Zalubowski, File)
A sign in a Kwik Trip store shows the store will no longer be using pennies to give change, on Oct. 23, 2025, in Yorkville, Wis. (AP Photo/Morry Gash)
A sign in a Kwik Trip store shows the store will no longer be using pennies to give change, on Oct. 23, 2025, in Yorkville, Wis. (AP Photo/Morry Gash)
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FILE – A lone penny is illuminated in a bin of completed pennies at the U.S. Mint in Denver on Aug. 15, 2007. (AP Photo/David Zalubowski, File)
The penny problem started in late summer and is only getting worse as the country heads into the holiday shopping season.
To be sure, not one retailer or bank has called for the penny to stick around. Pennies, especially in bulk, are heavy and are more often than not used exclusively to give customers change. But the abrupt decision to get rid of the penny has come with no guidance from the federal government. Many stores have been left pleading for Americans to pay in exact change.
“We have been advocating abolition of the penny for 30 years. But this is not the way we wanted it to go,” said Jeff Lenard with the National Association of Convenience Stores.
Trump announced on Feb. 9 that the U.S. would no longer mint pennies, citing the high costs. Both the penny and the nickel have been more expensive to produce than they are worth for several years, despite efforts by the U.S. Mint to reduce costs. The Mint spent 3.7 cents to make a penny in 2024, according to its most recent annual report, and it spends 13.8 cents to make a nickel.
“Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” Trump wrote on Truth Social.
The Treasury Department said in May that it was placing its last order of copper-zinc planchets — the blank metal disks that are minted into coins. In June, the last pennies were minted and by August, those pennies were distributed to banks and armored vehicle service companies.
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Troy Richards, president and chief operations officer at Louisiana-based Guaranty Bank & Trust Co., said he’s had to scramble to have enough pennies on hand for his customers since August.
“We got an email announcement from the Federal Reserve that penny shipments would be curtailed. Little did we know that those shipments were already over for us,” Richards said.
Richards said the $1,800 in pennies the bank had were gone in two weeks. His branches are keeping small amounts of pennies for customers who need to cash checks, but that’s it.
The U.S. Mint issued 3.23 billion pennies in 2024, the last full year of production, more than double that of the second-most minted coin in the country: the quarter. But the problem with pennies is they are issued, given as change, and rarely recirculated back into the economy. Americans store their pennies in jars or use them for decoration. This requires the Mint to produce significant sums of pennies each year.
The government is expected to save $56 million by not minting pennies, according to the Treasury Department. Despite losing money on the penny, the Mint is profitable for the U.S. government through its production of other circulating coins as well as coin proof and commemorative sets that appeal to numismatic collectors.
In 2024, the Mint made $182 million in seigniorage, which is its equivalent of profit.
Besides American’s penny hoarding habit, a logistical issue is also preventing pennies from circulating.
The distribution of coins is handled by the Federal Reserve system. Several companies, mostly armored carrier companies, operate coin terminals where banks can withdraw and deposit coins. Roughly a third of these 170 coin terminals are now closed to both penny deposits as well as penny withdrawals.
Bank lobbyists say these terminals being closed to penny deposits is exacerbating the penny shortage, because parts of the country that may have some surplus pennies are unable to get those pennies to parts of country with shortages.
“As a result of the U.S. Department of the Treasury’s decision to end production of the penny, coin distribution locations accepting penny deposits and fulfilling orders will vary over time as (penny) inventory is depleted” a Federal Reserve spokeswoman said.
The lack of pennies has also become a legal minefield for stores and retailers. In some states and cities, it is illegal to round up a transaction to the nearest nickel or dime because doing so would run afoul of laws that are supposed to place cash customers and debit and credit card customers on an equal playing field when it comes to item costs.
So, to avoid lawsuits, retailers are rounding down. While two or three cents may not seem like much, that extra change can add up over tens of thousands of transactions. A spokesman for Kwik Trip, the Midwest convenience store chain, says it has been rounding down every cash transaction to the nearest nickel. That’s expected to cost the company roughly $3 million this year. Some retailers are asking customers to give their change to local or affiliated charities at the cash register, in an effort to avoid pennies as well.
A bill currently pending in Congress, known as the Common Cents Act, calls for cash transactions to be rounded to the nearest nickel, up or down. While the proposal is palatable to businesses, rounding up could be costly for consumers.
The Treasury Department did not respond to a request for comment on whether they had any guidance for retailers or banks regarding the penny shortage, or the issues regarding penny circulation.
The United States is not the first country to transition away from small denomination coins or discontinue out-of-date coins. But in all of these cases, governments wound down the use of their out-of-date coins over a period of, often, years.
For example, Canada announced it would eliminate its one-cent coin in 2012, transitioning away from one-cent cash transactions starting in 2013 and is still redeeming and recycling one-cent coins a decade later. The “decimalization” process of converting British coins from farthings and shillings to a 100-pence-to-a-pound system took much of the 1960s and early 1970s.
The U.S. removed the penny from commerce abruptly, without any action by Congress or any regulatory guidance for banks, retailers or states. The retail and banking industries, rarely allies in Washington on policy matters related to point-of-sale, are demanding that Washington issue guidance or pass a law fixing the issues that are arising due to the shortage.
“We don’t want the penny back. We just want some sort of clarity from the federal government on what to do, as this issue is only going to get worse,” the NACS’ Lenard said.
WASHINGTON (AP) — The Trump administration is forging ahead with plans to eject some nonprofits from a popular student loan forgiveness program if their work is deemed to have a “substantial illegal purpose” — a move that could cut off some teachers, doctors and other public workers from federal loan cancellation.
New rules finalized Thursday give the Education Department expanded power to ban organizations from the Public Service Loan Forgiveness program. The Trump administration said it’s necessary to block taxpayer money from lawbreakers. Critics say it turns the program into a tool of political retribution.
Set to take effect in July, the policy is aimed primarily at organizations that work with immigrants and transgender youth.
It grants the education secretary power to exclude groups from the program if they engage in activities including the trafficking or “chemical castration” of children, illegal immigration and supporting terrorist organizations. “Chemical castration” is defined as using hormone therapy or drugs that delay puberty — gender-affirming care common for transgender children or teens.
It amounts to a major reworking of a program that has canceled loans for more than 1 million Americans and was created by Congress in 2007 to steer more college graduates into lower-paying public sector jobs. The Trump administration has yet to identify specific groups it intends to target, but it estimates fewer than 10 would be barred per year.
The program “was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex,” Education Undersecretary Nicholas Kent said in a statement.
The legal nonprofit Student Defense said it will sue to challenge the rules, arguing the administration is illegally “punishing public servants for their employers’ perceived political views.”
The program has rewarded a wide range of public service careers
The program promises to cancel federal student loans for government employees and many nonprofit workers after they have made 10 years of payments. It has long been open to government workers, teachers, firefighters and employees of public hospitals. Eligibility rules laid out by Congress focus mostly on nonprofits’ tax status and their field of work.
The benefit has gone to workers at organizations across the political spectrum. Yet in a March action demanding new limits, President Donald Trump said it has “misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means.”
A central concern of critics is the wide latitude the department is giving itself to determine if an organization’s work should be considered to have a “substantial illegal purpose.”
Employers across state and local government as well as nonprofits can be expelled from the program if a state or federal court rules against them, or if they agree to a legal settlement that includes admission of guilt. Performing gender-affirming care in the 27 states that outlaw it, for example, appears to be grounds for expulsion.
Even without a legal finding, the education secretary will be able to independently determine that an organization should be barred. The secretary would weigh whether the “preponderance of the evidence” leans against the employer.
The department dismissed concerns from many who said that bar is too low.
“It ensures decisions are grounded in fact, not speculation, and allows the Department to act promptly to protect both borrowers and taxpayers,” federal officials wrote.
Critics see an opening for decisions based on ideology
Among those opposing the proposal were prominent associations in higher education, health care and legal professions. In public comments submitted to the department, many called it an illegal overstep and said it would undermine an incentive that has helped address work shortages in high-demand fields.
The American Bar Association said it could decrease the ranks of public defenders and those in public interest law. Thousands of people will lose access to representation, the association said, “simply because those attorneys’ jobs were deemed politically unfavorable by the Secretary.”
The National Council of Nonprofits said the policy would allow future administrations from any political party to change eligibility rules “based on their own priorities or ideology.”
Rep. Tim Walberg, R-Mich., chair of the House Education and Workforce Committee, said the overhaul will prevent taxpayers from covering loan relief for employees at “radical organizations that violate state and federal laws.”
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Under the new rules, employers can only be sanctioned for activities that take place on or after July 1, 2026. Those barred from the program can reapply for eligibility after 10 years or rejoin sooner if they follow a “corrective action plan” approved by the secretary.
Documents from the department indicate that a single violation of the law may or may not be enough to get an employer barred, depending on the circumstances. Not all organizations that break the law have a “substantial illegal purpose,” the agency said, and it ultimately comes down to the secretary’s analysis of the evidence.
The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
JERUSALEM (AP) — Israel’s military said Thursday that Palestinians handed over two coffins containing the remains of dead hostages to the Red Cross in Gaza.
Fighters had previously returned the remains of 15 hostages since the start of the ceasefire, with 13 more still to be recovered.
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The latest handover is an indication that the fragile ceasefire agreement is moving forward despite Israeli strikes on Gaza overnight.
Officials in southern Gaza said Thursday that at least 40 people had been injured in the strikes, after Israel declared the ceasefire was back on Wednesday morning.
Mohammad Saar, head of the nursing department at Nasser Hospital in southern Gaza, said it received 40 people wounded in overnight strikes on Khan Younis.
The Israeli army confirmed it conducted strikes on “terrorist infrastructure that posed a threat to the troops” in Khan Younis. The area in southern Gaza is under the control of the Israeli military.
The ceasefire, which began Oct. 10, is aimed at winding down the deadliest and most destructive war ever fought between Israel and the Hamas.
