Average 30-year U.S. mortgage rate falls to 7.24%, its lowest in more than a month

WASHINGTON – The average rate on long-term U.S. home loans declined for a second consecutive week, reaching its lowest point in more than a month.

The 30-year fixed mortgage benchmark slipped to 7.24% from 7.32% a week earlier, according to mortgage buyer Freddie Mac. A year ago, the average stood at 6.17%.

The average rate on 15-year fixed mortgages, which are often used by homeowners refinancing their loans, also moved lower this week. It fell to 6.60% from 6.68% the previous week, compared with 5.41% a year ago.

Lower borrowing costs can ease some of the strain on would-be homebuyers who are already dealing with expensive housing finance.

Mortgage rates are shaped by inflation, Federal Reserve policy and investor expectations about the economy, among other influences. They typically track the direction of the 10-year Treasury yield, which lenders use as a reference when pricing home loans.

Rates had been rising since late February, when the U.S. war with Iran began, lifting oil prices and stoking inflation. The increase also reflected greater volatility in bond markets, which pushed up U.S. Treasury yields.

The 10-year Treasury yield has mostly drifted lower this month after climbing to its highest point since 2002. That has led the average 30-year mortgage rate to edge down from 7.4% earlier this month, when it hit its highest level in nearly three years.

The yield stood at 4.98% at midday in bond trading Thursday. It climbed above 5.30% earlier in the month and remains well above its 3.97% level from before the war with Iran.

U.S. home sales have remained sluggish this year largely because higher mortgage rates can add hundreds of dollars a month to borrowers’ costs, reduce buying power and cause many people to delay purchasing a home.

In late February, the average 30-year mortgage rate briefly fell to 5.98%, its lowest level since late 2022. Since then, the increase in rates has added about $350 to the monthly payment on a $400,000 home loan, based on the latest average.

Depending on income, credit and other factors, borrowers may qualify for 30-year mortgage rates above or below the current average.

The U.S. housing market has been weak since 2022, when mortgage rates began rising from their pandemic-era lows. Sales of previously owned U.S. homes were essentially unchanged last year, stuck at a 30-year low.