The average rate on a 30-year mortgage in the U.S. edged higher this week, ending a seven-week slide that helped ease borrowing costs for home shoppers leading into the spring homebuying season.
The rate averaged 6.65% this week, up from 6.63% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.74%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also ticked up this week. The average rate rose to 5.8% from 5.79% last week. A year ago, it averaged 6.16%, Freddie Mac said.
Mortgage rates are influenced by several factors, including bond market investors’ expectations for future inflation, global demand for U.S. Treasurys and the Federal Reserve’s interest rate policy decisions.
After climbing to just above 7% in mid-January, the average rate on a 30-year mortgage declined through last week, echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The yield, which was approaching 4.8% in mid-January, has been mostly falling since then, reflecting worries about the economy’s growth and the fallout from the Trump administration’s decision to impose tariffs on imported goods from many of the nation’s key trade partners. The yield was at 4.31% in midday trading Thursday.
So far, the pullback in rates hasn’t improved the affordability equation for many would-be homebuyers, keeping the housing market in a sales slump.
Still, any easing in borrowing costs is welcome relief for home shoppers, especially as the number of homes on the market is up sharply compared to a year ago and prices are rising more slowly nationally.
“The combination of modestly lower mortgage rates and improving inventory is a positive sign for homebuyers in this critical spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist.
