The average rate on a 30-year mortgage fell slightly, dropping to 6.89% from 6.95% the previous week, providing some relief for home shoppers facing record-high home prices.
This year, the average mortgage rate has mostly hovered around 7%, more than double of what it was three years ago.
The big picture: The elevated mortgage rates have deterred many home shoppers this year, extending the housing slump into its third year.
- Borrowing costs on 15-year fixed-rate mortgages also fell, with the average rate decreasing to 6.17% from 6.25% the previous week.
- Mortgage rates are influenced by various factors, including the bond market’s response to the Federal Reserve’s interest-rate policy and the moves in the 10-year Treasury yield, used as a guide for pricing home loans.
Driving the news: The 10-year Treasury yield has been generally declining, leading to a decrease in mortgage rates, following hopes that inflation is slowing enough to prompt the Fed to lower its main interest rate.
