November 16th 2024.
This week, the average rate for a 30-year mortgage in the United States showed a slight decline, breaking a six-week streak of increases. According to mortgage buyer Freddie Mac, the rate went down from 6.79% to 6.78%. However, it is worth noting that this is still lower than the rate from a year ago, which was at 7.4%.
In addition, borrowing costs for 15-year fixed-rate mortgages, a popular option for homeowners looking to refinance their home loans at a lower rate, also saw a slight decrease this week. The average rate went down from 6% to 5.99%. This is significantly lower than the rate of 6.76% from the same time last year.
The movement of mortgage rates is influenced by various factors, including the yield on 10-year Treasury bonds, which lenders use as a benchmark for pricing home loans. In recent weeks, bond yields have been rising due to positive reports on inflation and the economy.
Last week, there was a surge in bond yields due to expectations surrounding President-elect Donald Trump's plans. Many anticipate that his proposals to lower tax rates, increase tariffs, and reduce regulations could potentially lead to higher government debt and inflation, as well as faster economic growth.
Currently, the yield on 10-year Treasury bonds sits at 4.41% as of midday Thursday, a significant increase from 3.62% back in September.
Despite the recent upward trend, the average rate for a 30-year mortgage is still lower than its peak of 7.22% in May of this year. In fact, just last month, the average rate hit a two-year low of 6.08%.
Experts predict that mortgage rates will continue to fluctuate throughout the year, but overall, they are expected to hover around 6% in 2025.
Unfortunately, the combination of high mortgage rates and rising home prices has contributed to a decline in home sales since 2022. To stay updated on the latest real estate and business news, be sure to sign up for our weekly newsletter, On the Block.
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