Mortgage Rates Drop Slightly, Offering Some Relief to Homebuyers

The average rate on a 30-year mortgage in the U.S. has eased to 6.69%, the lowest since late October, down from 6.81% last week, according to Freddie Mac. This marks a decrease from last year’s 7.03% average. Rates on 15-year fixed-rate mortgages also dipped, falling to 5.96% from 6.1%.

Mortgage rates are influenced by factors like the U.S. 10-year Treasury yield and Federal Reserve policies. While rates had risen recently, they began declining after the Fed cut its benchmark interest rate in September.

Despite elevated rates and high home prices making ownership challenging for many, mortgage applications have increased. The Mortgage Bankers Association reported a 2.8% rise in applications last week, with purchase loan activity hitting its highest level since January, fueled by slightly lower rates and increased housing inventory.

However, relief may be limited. Economists predict rates will hover around 6.5% in 2025, coupled with rising home prices, likely keeping many prospective buyers priced out of the market.

Source: AP News