Mortgage rates fall to 7.24%, lowest in over a month

The average 30-year fixed mortgage rate dropped to 7.24% this week.

Freddie Mac reported Thursday that the benchmark rate declined from 7.32% in the prior week. This marks the second consecutive weekly decrease. The current figure is the lowest recorded in more than a month. A year ago, the average rate stood at 6.17%.

Borrowers seeking 15-year fixed loans also saw costs decline. The average rate for those loans fell to 6.60% from 6.68% last week. That rate was 5.41% at this time last year. Lower rates reduce the monthly payment burden for prospective buyers and those refinancing existing debt.

Rates have trended upward since late February, when the U.S. war with Iran began. The conflict increased oil prices and inflation, which pushed bond yields higher. The 10-year Treasury yield, a key indicator for mortgage pricing, recently hit its highest level since 2002. It surged past 5.30% earlier this month. The yield stood at 4.98% at midday Thursday, remaining well above the pre-war level of 3.97%.

The recent easing in Treasury yields has pulled mortgage rates down from a high of 7.4% recorded earlier this month. That peak represented the highest level in nearly three years. The shift in bond market expectations has created a slight downward momentum in lending costs.

High borrowing costs continue to suppress U.S. home sales. The average cost for a $400,000 loan has increased by roughly $350 per month since late February, when rates briefly dipped to 5.98%. This added expense limits purchasing power for many consumers. Sales of previously occupied homes were flat last year, a level not seen in three decades.

The housing market has remained sluggish since 2022, when rates began climbing from pandemic-era lows. Individual borrowers may qualify for rates below or above the national average based on income and credit. The current 7.24% average reflects the latest data from Freddie Mac.