The average rate on a 30-year mortgage has fallen to 6.67%, its lowest point since the beginning of April. According to Freddie Mac, mortgage rates fell again this week. It’s the fifth straight week that the average rate has decreased, reflecting a longer-term development. Last year, this cap was set at 6.95%. This change reflects an alarming trend in the national housing market over the last year.
After a long, long period of steadily increasing mortgage rates, this is more welcome news for hopeful homebuyers. The new average rate of 6.67% marks a drop from last week’s rate of 6.77%. Additionally, it is still quite a bit above its macroscale high point of just over 7%, which it hit in mid-January. As rates have continued to drop, demand from borrowers has picked up significantly. According to a report by the Mortgage Bankers Association, mortgage applications have jumped 2.7% from one week earlier, seasonally adjusted.
The lowest mortgage rate recorded this year was in early April when it briefly fell to 6.62%. All in all, economists predict that mortgage rates will remain relatively stable in the months ahead. Specifically, they forecast the average 30-year mortgage rate to end up between 6% and 7% this year. This stability can help reduce anxieties for borrowers. Others have been pinched by declining mortgage rates, which raise their monthly payments by hundreds of dollars and erode their buying power.
Long-term fixed-rate mortgages are on a downward path. At the same time, costs for 15-year fixed-rate mortgages fell to 5.80%, down from 5.89% a week ago. This is another sign of a wider movement toward reducing borrowing costs through all types of mortgage products.
The stage for these changes is set by a remarkable plunge in the yield of the 10-year Treasury bond. It now stands at 4.33%, down from 4.58% in mid-September. Treasury yields are falling, which typically pushes mortgage rates down. This shows formidable momentum for the present course of the housing finance market.
