Mortgage Rates Decline for First Time in Six Weeks, Freddie Mac Reports
Key Takeaways
- •The average 30-year fixed-rate mortgage decreased to 6.67%, ending a six-week streak of weekly increases.
- •The 15-year fixed-rate mortgage fell to 5.96% from 6.01% in the prior week.
- •Freddie Mac's chief economist Sam Khater reported that housing affordability has improved year-over-year and that borrowers are responding to even modest rate changes.
- •Mortgage rates track the 10-year Treasury yield, which stood near 4.64% and was influenced by Middle East conflict and inflation expectations.
- •Realtor.com senior economist Joel Berner indicated that current mortgage rate levels may remain stable in the coming months due to persistent inflation and Fed policy.
Mortgage rates declined for the first time in six weeks, according to Freddie Mac's latest Primary Mortgage Market Survey released Thursday.
The average rate on the benchmark 30-year fixed-rate mortgage eased to 6.67%, down from 6.69% the previous week. A year earlier, the average 30-year rate stood at 6.58%. While the weekly decline was modest, it comes after a steady climb that had pushed borrowing costs to their highest levels since mid-2024, keeping many prospective buyers on the sidelines and contributing to a sluggish fall housing market.
"Housing affordability has improved from a year ago, and recent increases in purchase and refinance applications suggest that borrowers continue to respond to even modest changes in mortgage rates," said Sam Khater, Freddie Mac's chief economist. The sensitivity of borrower activity to small rate movements underscores how rate-sensitive today's market has become, as many would-be buyers and refinancers have been waiting for any sign of relief.
On the 15-year fixed-rate mortgage, the average rate fell to 5.96% from 6.01% the prior week.
Mortgage rates are influenced by multiple factors, including the Federal Reserve and geopolitical developments. Although mortgage rates are not directly tied to the Fed's interest rate decisions, they closely track the 10-year Treasury yield, which hovered around 4.64% on Thursday afternoon.
Joel Berner, senior economist at Realtor.com, noted that the 10-year Treasury yield rose only slightly this week as the conflict in Iran continued, placing pressure on oil prices and consequently shaping expectations of future inflation.
"Yesterday's CPI print came in right in line with expectations, having little impact on the markets," Berner said. "While it's certainly good news that inflation did not surprise us by coming in hotter than expected, a cooler readout could have given the Federal Reserve more pause on what looks like an upcoming rate hike before the end of 2026 after holding rates late last month."
The ongoing conflict in the Middle East has also weighed on borrowing costs.
"All told, there is little downward pressure on mortgage rates between a Middle East conflict that's keeping inflation high and a Federal Reserve that's laser-focused on driving that inflation lower," Berner said. "Current mortgage rate levels may become quite familiar in the months ahead."
