Little relief: mortgage interest rates are falling, bringing the average interest on a home loan with a 30-year term to just under 7%

LOS ANGELES — The average interest rate on a 30-year mortgage fell to just under 7% this week, offering little relief to potential homebuyers already dealing with the challenges of rising home prices and a relatively limited supply of homes on the market.

Interest rates fell to 6.99% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. A year ago the average was 6.71%.

Borrowing costs for 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, dropping the average interest rate to 6.29% from 6.36% last week. A year ago, it averaged 6.07%, Freddie Mac said.

Mortgage rates are affected by several factors, including how the bond market responds to the Federal Reserve's interest rate policy and movements in 10-year Treasury yields, which lenders use to guide the pricing of home loans.

Yields fell this week after economic data showed slower growth. Signs that the economy is cooling could push inflation lower, which could convince the Federal Reserve to cut short-term interest rates from the highest level in more than two decades.

The Fed, which will hold its next policy meeting next week, has insisted it has no plans to cut rates until it has more confidence that price increases will slow sustainably to the 2% target. Until then, mortgage rates are unlikely to fall significantly, economists say.

“Overall, we expect inflation to continue to slow and mortgage rates could fall to around 6.5% by late 2024 or early 2025,” said Ralph McLaughlin, senior economist at Realtor.com.

The average interest rate on a 30-year mortgage is still at a 20-year high, adding hundreds of dollars per month in mortgage costs and limiting homebuyers' purchasing options.

Increased mortgage interest rates have dampened home sales this spring. Sales of previously occupied U.S. homes fell March And April while home buyers faced rising borrowing costs and prices.

As interest rates have gotten higher, so have the monthly payments home buyers have to make when applying for a mortgage.

According to data from the Mortgage Bankers Association, the national average monthly payment listed on home loan applications was $2,256 in April, up 2.5% from the previous month and 6.8% higher than a year earlier.

Related Posts

  • Business
  • June 19, 2024
  • 3 views
  • 3 minutes Read
A new Boeing whistleblower claims defective aircraft parts may have been used in jetliners

A new whistleblower report claims defective aircraft parts may have been used in Boeing jets. It comes as the company suffered a series of safety and quality issues, including a…

  • Business
  • June 19, 2024
  • 5 views
  • 3 minutes Read
FEMA pushed to add extreme heat and smoke from wildfires to the list of disasters

A coalition of organizations is calling on the Federal Emergency Management Agency to add extreme heat and smoke from wildfires to the list of scenarios worthy of being declared a…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

How grounding came into existence and its modern applications

  • June 19, 2024
How grounding came into existence and its modern applications

As 'zombie deer disease' spreads, scientists search for answers

  • June 19, 2024
As 'zombie deer disease' spreads, scientists search for answers

Here are Wall Street's favorite picks in the S&P 500 for the second half of the year

  • June 19, 2024
Here are Wall Street's favorite picks in the S&P 500 for the second half of the year

Here is the complete list of hurricane names for the 2024 season

  • June 19, 2024
Here is the complete list of hurricane names for the 2024 season

How to protect yourself from a passive-aggressive partner

  • June 19, 2024
How to protect yourself from a passive-aggressive partner

Large wildfires create weather that promotes more fire

  • June 19, 2024
Large wildfires create weather that promotes more fire

Britain is investigating HPE's planned $14 billion takeover of Juniper Networks

  • June 19, 2024
Britain is investigating HPE's planned $14 billion takeover of Juniper Networks

Nvidia overnight rally lifts chip-related stocks in Asia on AI optimism

  • June 19, 2024
Nvidia overnight rally lifts chip-related stocks in Asia on AI optimism

Six scary predictions that early science fiction authors got completely wrong

  • June 19, 2024
Six scary predictions that early science fiction authors got completely wrong

Navigating the home buying process: tips for first-time buyers

  • June 19, 2024
Navigating the home buying process: tips for first-time buyers

What we want from food: Energy, muscle strength and better health

  • June 19, 2024
What we want from food: Energy, muscle strength and better health