Nationwide home loan rates declined slightly this week, marking the first decrease following two consecutive weeks of upward movement.
The standard 30-year fixed mortgage rate decreased to 6.36% from the previous week’s 6.37%, according to Thursday’s report from mortgage buyer Freddie Mac. This represents a notable improvement from the 6.81% average recorded one year ago.
Rates for 15-year fixed mortgages, which are favored by homeowners looking to refinance existing loans, also declined this week. These rates dropped to 5.71% from 5.72% the previous week. Freddie Mac reported this rate stood at 5.92% twelve months ago.
Several factors impact mortgage rates, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.
The 30-year mortgage average had dipped below 6% in late February for the first time since late 2022, but has not returned to that level since.
Though mortgage rates remain lower than they were at this point last year, they have generally moved upward since the war with Iran began. The Strait of Hormuz closure has disrupted energy markets, causing crude oil prices to surge sharply and becoming a major inflation factor.
Higher oil price expectations have increased the yield on the U.S. 10-year Treasury note, which lenders reference when setting home loan prices.
Thursday’s midday bond market trading showed the 10-year Treasury yield at 4.44%. This yield was only 3.97% in late February, prior to the outbreak of war.
