The average 30-year mortgage rate in the U.S. fell for the third week in a row, a welcome trend for potential homebuyers during what is often a less competitive time of year for the housing market.
The rate fell to 6.6% from 6.69% last week, mortgage broker Freddie Mac said Thursday. Last year, the rate reached 6.95%.
The cost of a 15-year fixed-rate loan, which is popular with homeowners looking to refinance their home loan to a lower rate, was also eased this week. The average rate fell to 5.84% from 5.96% last week. Last year, it reached 6.38%, Freddie Mac said.
The average 30-year mortgage rate is now at its lowest level since October 24, when it was at 6.54%.
“The combination of lower mortgage rates, growth in consumer spending and the retail market has boosted consumer demand in recent weeks,” said Sam Khater, Freddie Mac’s chief economist. considering that home buyers continue to face headwinds. “
Rising home prices and rising home prices have kept homeowners out of the reach of potential home buyers. US home sales are on track for their worst year since 1995.
Mortgage rates are influenced by several factors, including trends in the yield on the US 10-year Treasury bond, which lenders use as a benchmark for mortgage rates.
The yield, which was as low as 3.7% as recently as September, has hovered around 4.2% this month. It was at 4.3% on Thursday afternoon.
The latest drop in rates follows a sharp rise since the average 30-year mortgage rate fell to a two-year low of 6.08% in late September after the Federal Reserve cut its interest rate to a two-decade high. Although the central bank does not invest money to pay off debt, its actions and the way it increases inflation affect the movement of the 10-year Treasury yield.
Many economists and traders on Wall Street expect the Fed to cut its key interest rate again at its policy meeting next week.
Homebuyers and homeowners looking to lower their mortgage payments are taking advantage of lower mortgage rates. Mortgage applications rose 5.4% last week from the previous week, the fifth straight increase, according to the Mortgage Bankers Association. Refinance loan applications rose 27%.
“Purchasing applications have increased year-over-year every week except for the past three months, a positive sign for the credit market to close this year,” said MBA CEO Bob Broeksmit.