Average US 30-year mortgage rate slips to 7.18% for a third consecutive week

Average rate was 6.22% a year earlier.

By MATT OTT, AP Business Writer

WASHINGTON (AP) — The average rate on long-term U.S. mortgages eased for a third straight week, giving some help to would-be buyers still contending with elevated home prices.

Freddie Mac said the average rate on a 30-year fixed mortgage dropped to 7.18% from 7.24% the previous week. The average stood at 6.22% a year earlier.

Rates on 15-year fixed mortgages, which are often used by homeowners refinancing their loans, also moved lower. That average fell to 6.57% from 6.60% a week earlier, compared with 5.50% a year earlier.

Lower borrowing costs can ease some of the strain on prospective buyers facing high monthly payments.

Mortgage rates are shaped by inflation, Federal Reserve policy and investor expectations for the economy, among other forces. They generally track the 10-year Treasury yield, which lenders use as a benchmark when pricing home loans.

Until recently, mortgage rates had been climbing since late February, when the U.S. war with Iran began, lifting oil prices and adding to inflation. The increase also reflected sharp bond-market swings that pushed up U.S. Treasury yields.

Over the past month, however, the 10-year Treasury yield has mostly eased after rising to its highest level since 2002. That has helped pull the average 30-year mortgage rate back from 7.4%, its peak in nearly three years reached early last month.

The yield was 4.84% at midday Thursday in bond trading, its lowest level since early September. It had jumped above 5.30% in early October and remains well above the 3.97% level seen before the war with Iran.

Home sales in the U.S. have remained sluggish this year largely because of higher mortgage rates, which can add hundreds of dollars a month to borrowing costs, reduce buying power and lead many people to delay purchasing a home.

In late February, the average 30-year mortgage rate briefly fell to 5.98%, the lowest reading since late 2022. Since then, the increase in rates has added roughly $300 to $350 to the monthly cost of financing a $400,000 home loan.

Borrowers may qualify for rates above or below the national average depending on income, credit and other factors.

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