The average rate on a 30-year mortgage in the U.S. eased for the fourth week in a row, an encouraging sign for prospective home shoppers as the spring homebuying season gets underway.
The average rate fell to 6.87% from 6.89% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.77%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, rose this week. The average rate increased to 6.09% from 6.05% last week. A year ago, it averaged 6.12%, Freddie Mac said.
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Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. The average rate on a 30-year mortgage briefly fell to a 2-year low last September, but has been mostly hovering around 7% this year. That’s more than double the 2.65% record low the average rate hit a little over four years ago.
Rising home prices and elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many prospective home shoppers on the sidelines, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase.
Sales of previously occupied U.S. homes fell last year to their lowest level in nearly 30 years, extending a national home sales slump that began in 2022 as mortgage rates began to climb from their pandemic-era lows.
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