30-year mortgage rate slips to lowest in 3 months

The average rate on a 30-year mortgage loan 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 —  the lowest level in about three months, 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.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, rose this week, pushing the average rate to 6.16% from 6.13% last week. A year ago, it averaged 6.06%, Freddie Mac said.

 

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.

Investors are closely watching the Federal Reserve to gauge the path of potential rate cuts later this year. Earlier this week, Fed Governor Michelle Bowman warned that there are some upside risks to inflation and rates may need to remain elevated for some time.

“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,” Sam Khater, Freddie Mac’s chief economist, said in a statement.

Mortgage rates slip

The interest rate for a 30-year, fixed loan is at its lowest level in about three months.

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