Home Buying

Average rate on a 30-year mortgage slips for first time in weeks

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week.

mortgage-rate-ap-home-buyers
A for-sale sign stands outside a home on the market in October in the east Washington Park neighborhood of Denver. Economists expects mortgage rates to remain volatile for the remainder of the year. David Zalubowski/Associated Press

By ALEX VEIGA, Associated Press

1 minute to read

The average rate on a 30-year mortgage in the United States edged lower this week, ending a six-week climb.

The rate slipped to 6.78 percent from 6.79 percent last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.4 percent. Five years ago, the rate stood at 3.75 percent, according to the Federal Reserve Bank of St. Louis.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate slipped to 5.99 percent from 6 percent last week. A year ago, it averaged 6.76 percent, Freddie Mac said. Five years ago, it averaged 3.20 percent, according to the St. Louis Fed.

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Mortgage rates are influenced by several factors, including the yield on US 10-year Treasury bonds, which lenders use as a guide to price home loans. Bond yields have been rising in recent weeks following encouraging reports on inflation and the economy.

Last week, bond yields surged on expectations that President-elect Donald Trump’s plans to lower tax rates, increase tariffs, and reduce regulation could ultimately lead to higher US government debt and inflation, along with faster economic growth.

The yield on the 10-year Treasury was at 4.41 percent at midday Thursday. It was at 3.62 percent as recently as mid-September.

Despite its recent upward move, the average rate on a 30-year mortgage is still down from 7.22 percent in May, its peak so far this year. In late September, the average rate got as low as 6.08 percent — its lowest level in two years.

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Economists predict that mortgage rates will remain volatile this year, but generally forecast them to hover at 6 percent in 2025.

Elevated mortgage rates and high prices have helped keep the US housing market in a sales slump going back to 2022.

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