Mortgage Rates Fall for Third Week, 30-Year Fixed at 6.81%

The average interest rate for long-term mortgages in the United States has decreased to 6.81%, marking the third consecutive week of decline. This rate is the lowest since mid-May. The average rate for a 30-year fixed-rate mortgage stands at 6.81%, down from 6.84% the previous week. This downward trend in mortgage rates comes as potential homebuyers continue to grapple with high borrowing costs and rising housing prices. The sustained decrease in mortgage rates may offer some relief to prospective buyers, potentially making homeownership more accessible.

The average rate for a 15-year fixed-rate mortgage, which is popular among homeowners looking to refinance, has also decreased. The average rate for a 15-year fixed-rate mortgage stands at 5.96%, down from 5.97% the previous week. This rate is lower than the average rate of 6.13% from a year ago. The decrease in mortgage rates for both 30-year and 15-year fixed-rate mortgages may encourage more homeowners to refinance their existing mortgages, potentially leading to lower monthly payments and overall savings.

Mortgage rates are influenced by a variety of factors, including the Federal Reserve's monetary policy decisions and investor expectations for the economy and inflation. A key indicator is the yield on 10-year U.S. Treasury notes, which lenders use as a reference for setting mortgage rates. On Wednesday, the yield on 10-year Treasury notes was 4.35%, down from 4.58% a few weeks ago. The decrease in the yield on 10-year Treasury notes may have contributed to the decline in mortgage rates, as lenders adjust their rates in response to changes in the yield on Treasury notes.

Despite the recent decline in mortgage rates, the average rate for a 30-year fixed-rate mortgage remains close to the year's high of slightly above 7% reached in mid-January. The lowest rate for a 30-year fixed-rate mortgage this year was reached in early April, when it briefly fell to 6.62%. The recent decline in mortgage rates may offer some relief to potential homebuyers, but the overall economic landscape, including inflation and employment data, will continue to influence mortgage rates in the coming weeks. The decline in rates may also impact the housing market, potentially increasing demand as buyers take advantage of lower borrowing costs.