The average rate on a 30-year mortgage in the U.S. declined for the third week in a row, another positive move for prospective homebuyers during what’s traditionally the housing market’s busy season.
The rate fell to 6.62% from 6.64% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.88%.
The average rate has mostly trended lower since reaching just over 7% in mid-January. When mortgage rates decline, they boost homebuyers’ purchasing power.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, were unchanged from last week. The average rate remained at 5.82%, but is down 6.16% a year ago, Freddie Mac said.
Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for future inflation.
The average rate on a 30-year mortgage loosely follows moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The yield, which has mostly fallen this year after climbing to around 4.8% in mid-January, has been volatile of late as bond investors reacted to the Trump administration’s decision to escalate U.S. tariffs on goods imported from nations around the world.
After sliding to just 4.01% at the end of last week, the 10-year Treasury yield climbed to nearly 4.5% Wednesday morning. It was at 4.36% in afternoon trading Thursday following the White House’s decision to temporarily pause the new tariffs on most nations, even while increasing import taxes on China.
The latest drop in mortgage rates partially reflects the bond market’s uncertainty over the Trump administration’s on-again, off-again tariff policy, which is likely to keep mortgage rates volatile, said Lisa Sturtevant, chief economist at Bright MLS.
“All of the uncertainty in the economy and in the mortgage market is making it difficult for prospective homebuyers to know what to do,” she said. “Should they buy now or wait until later this year and hope that rates will come down further?”
Recent forecasts by housing economists generally called for the average rate on a 30-year mortgage to remain around 6.5% this year.
The U.S. housing market has been in a sales slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes fell last year to their lowest level in nearly 30 years.
Easing mortgage rates and more homes on the market nationally helped drive sales higher in February from the previous month, though they were down year-over-year.
Still, home shoppers who can afford to buy at current mortgage rates may benefit from more buyer-friendly trends this spring homebuying season, including a sharp increase in home listings and lower asking prices in some metro areas.
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