The average rate on a 30-year mortgage dropped to 6.74% from 6.88% last week, mortgage buyer
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 6.16% from 6.22% last week. A year ago it averaged 5.90%,
“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation," said
The recent pullback in rates follows a string of rate increases. Mortgage rates rose for most of February as stronger-than-expected reports on inflation and the economy fueled speculation among bond investors that the
Investors’ expectations for future inflation, global demand for
Economists expect that mortgage rates will ease further this year, though most forecasts have the average rate on a 30-year mortgage going no lower than 6% by the end of the year. But that's not likely to happen until the Fed begins cutting its short-term interest rate, something
Despite the choppy trajectory in mortgage rates this year, the average rate on a 30-year home loan is still down from the 23-year high of 7.79% it reached in late October.
“Rates are much lower than they were last fall when they hovered near 8%,” said
The decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale.
Lower rates helped lift sales of previously occupied
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.16%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.
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