Mortgage rates are sitting near their lowest averages in more than a month – a shift that’s luring more homebuyers into the market.
The 30-year, fixed-rate mortgage averaged 6.69% as of Thursday, according to mortgage giant Freddie Mac’s weekly survey. That’s lower than the previous week, and a significant decrease from the same time last year when rates averaged 7.03%.
Daily measures of those borrowing costs, considered more volatile than weekly averages, showed the same trend. As of Thursday afternoon, the 30-year, fixed-rate mortgage had eased slightly to 6.84%, Mortgage News Daily data showed. In other words, if a homebuyer took out a $250,000 mortgage Thursday, they’d have a monthly payment of about $1,636.
From the Homes.com blog: What Is a 30-Year Fixed Mortgage and How Can I Qualify?
At the same time, the 15-year, fixed-rate mortgage average had also decreased as of Thursday, the survey said. It averaged 5.96%, lower than the previous week’s average and lower than the average of 6.29% from the same time a year earlier.
And on a daily basis, the 15-year, fixed-rate mortgage had eased slightly from a day earlier to 6.01%, according to Mortgage News Daily.
It’s the second week in a row that mortgage rate averages have declined, a shift that has brought more homebuyers into the market. As for what’s next: economists said in a survey from personal finance website Bankrate that upcoming data about the economy will determine how mortgage rates move in the coming weeks.
“I expect rates to yo-yo in a tight range until we get clarity on tariffs and inflation,” Sean Salter, associate professor of finance at Middle Tennessee State University, said.
And Michael Becker, branch manager at Sierre Pacific Mortgage, said “the direction of rates will depend heavily upon” the jobs report that will be released on Friday. “A weaker-than-expected report and bonds will rally and mortgage rates will drop.”
Even so, because other affordability challenges are persisting – for example, unusually high home prices – small decreases in mortgage rates could be enough to make homeownership a possibility for some consumers, according to Freddie Mac’s Chief Economist Sam Khater.
“Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved,” he said in a statement. “The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist.”