Mortgage Rates Fall to 7.24%, Marking Second Straight Weekly Decline

The average 30-year fixed-rate mortgage in the United States dropped to 7.24% this week, marking the second consecutive weekly decline. Mortgage buyer Freddie Mac reported the new benchmark on Thursday. This figure represents the lowest level recorded in more than a month.

The rate decreased from 7.32% during the previous week. For context, the average 30-year rate stood at 6.17% at this time last year. Borrowers seeking shorter-term options also saw costs ease this week. The average rate for 15-year fixed mortgages fell to 6.60%, down from 6.68% the week prior. One year ago, that specific rate was 5.41%.

Lenders set home loan rates based on several economic factors. These include inflation data, Federal Reserve policy, and investor expectations within the bond market. Typically, mortgage pricing tracks the movement of the 10-year Treasury yield. Lenders use this specific government bond yield as a primary guide for determining costs.

The 10-year Treasury yield sat at 4.98% during midday trading on Thursday. This level remains significantly higher than the 3.97% rate seen before the war with Iran. Earlier this month, the yield surged past 5.30%. The current rate environment continues to reflect volatility in the bond market despite the recent weekly dip in mortgage averages.