This week, the average interest rate on a 30-year fixed-rate U.S. mortgage fell to 6.19%. This historic drop makes the rate of people experiencing homelessness approaching its all-time low mark set earlier this year. This adjustment is indicative of a much larger shift underway in the U.S. mortgage market. The average rate on a 15-year fixed come down too. The drop in rates follows three straight weeks of increases, a sign that the lending climate may be turning after a prolonged period of rising interest rates.
In fact, Freddie Mac just came out with its latest mortgage rate estimates to reflect this. The national average rate on a 30-year mortgage has fallen in recent weeks from 6.69% last year down to 6.19% today. That’s a huge drop to 5.44% for this week considering that the average rate was still at 5.51% last week. It’s the second week in a row that mortgage rates have fallen sharply, in line with a sharp shift in mortgage market conditions.
Mortgage rates typically follow the direction of the 10-year Treasury yield. That’s the benchmark lenders look to in order to price conventional home loans competitively. At noon on Thursday, the 10-year yield was down below 4.1%. That’s a staggering drop from 5.96% just a year ago. As of today, the 10-year yield has fallen to its lowest level since October 30. At that time, it had dipped down to 6.17%, the lowest point we’ve experienced in more than a year.
The latest decline in mortgage rates is welcome news for hopeful homebuyers. It’s a huge win for consumers hoping to refinance their current loans. Increasing home affordability by lowering mortgage rates would boost demand in the housing market.
