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The average rate on a 30-year mortgage in the US slips to 6.78%

FILE - A housing development in Cranberry Township, Pa., is shown on March 29, 2024. (AP Photo/Gene J. Puskar, File) (Gene J. Puskar, Copyright 2024 The Associated Press. All rights reserved)

The average rate on a 30-year mortgage in the U.S. edged lower this week, ending a six-week climb.

The rate slipped to 6.78% from 6.79% last week, mortgage buyer Freddie Mac said Thursday. Thatā€™s still down from a year ago, when the rate averaged 7.4%.

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Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate slipped to 5.99% from 6% last week. A year ago, it averaged 6.76%, Freddie Mac said.

Mortgage rates are influenced by several factors, including the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to price home loans. Bond yields have been rising in recent weeks following encouraging reports on inflation and the economy.

Last week, bond yields surged on expectations that President-elect Donald Trumpā€™s plans to lower tax rates, increase tariffs and reduce regulation could ultimately lead to higher U.S. government debt and inflation, along with faster economic growth.

The yield on the 10-year Treasury was at 4.41% at midday Thursday. It was at 3.62% as recently as mid-September.

Despite its recent upward move, the average rate on a 30-year mortgage is still down from 7.22% in May, its peak so far this year. In late September, the average rate got as low as 6.08% ā€” its lowest level in two years.

Economists predict that mortgage rates will remain volatile this year, but generally forecast them to hover around 6% in 2025.

Elevated mortgage rates and high prices have helped keep the U.S. housing market in a sales slump going back to 2022.


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