The benchmark 30-year fixed-rate mortgage dropped to 7.32% from 7.40% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.19%.
Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also eased this week. That average rate slipped to 6.68% from 6.71% last week. A year ago, it was at 5.44%.
U.S. home sales remain stalled this year in large part because of rising mortgage rates, which can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing power and prompting many to put off buying a home.
In late February, the average rate on a 30-year mortgage briefly dipped to 5.98%, its lowest level going back to late 2022. The rise in rates since then has added roughly $355 to the monthly cost for a borrower financing a $400,000 home loan, going by the latest average rate.
Depending on a borrower’s income, credit and other factors, they may qualify for a rate on a 30-year mortgage that is below or above the current average.
The U.S. housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low.
In its latest forecast, mortgage buyer Fannie Mae projects that the rate on a 30-year mortgage will average 7.4% in the final quarter of this year, and average 7.5% in 2027.
