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XPost: sac.politics, alt.politics.economics
The average rate on a 30-year U.S. mortgage eased this week, offering
little relief for prospective homebuyers facing record-high home prices.
The long-term rate slipped to 6.74% from 6.75% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.78%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased. The average rate dropped to
5.87% from 5.92% last week. A year ago, it was 6.07%, Freddie Mac said.
Elevated mortgage rates have been weighing on the U.S. housing market,
which has been in a sales slump going back to 2022, when rates started to
climb from the rock-bottom lows they reached during the pandemic.
Sales of previously occupied U.S. homes, which sank to their lowest level
in nearly 30 years in 2024, have remained sluggish this year as rising
home prices and stubbornly high mortgage rates have made homeownership financially untenable for many Americans.
Elevated mortgage rates are also discouraging many homeowners from selling because they locked in mortgage rates when they were much lower.
Mortgage rates are influenced by several factors, from the Federal
Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation.
The main barometer is the 10-year Treasury yield, which lenders use as a
guide to pricing home loans. The yield was at 4.41% at midday Thursday,
down from 4.40% late Wednesday, following the latest signals that the U.S. economy seems to be holding up OK despite all the pressures on it from
tariffs and elsewhere.
Yields have moved higher for most of this month as traders bet that the
Fed will hold its key short-term interest rate steady at its upcoming
meeting next week, despite President Donald Trump demanding that the Fed
to lower rates.
A less independent Fed could mean lower short-term rates, which influence
the interest consumers pay on credit cards and auto loans, but it could
have the opposite effect on the longer-term bond yields that influence the rates on home loans.
The average rate on a 30-year mortgage has remained relatively close to
its high so far this year of just above 7%, set in mid-January. The 30-
year rate’s low point this year was in early April when it briefly dipped
to 6.62%.
https://abcnews.go.com/Business/wireStory/average-long-term-us-mortgage- rate-eases-674-124039799
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