Matt Ott, AP Business News
WASHINGTON (AP) – The average 30-year U.S. mortgage rate has fallen conservatively for the second consecutive week, but home borrowing costs remained increased.
Mortgage buyer Freddie Mac said Thursday that long-term interest rates have returned from 6.85% to 6.84%. A year ago, the price averaged 6.95%.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ economic and inflation expectations. The important barometer is the 10-year Treasury yield. This is used by lenders as a guide to mortgage pricing.
Treasury yields for 2010 were 4.38% at noon on Thursday, down from 4.58% just a few weeks ago.
Bond yields have withdrawn in recent weeks but have risen sharply since reaching its 2025 low in early April, reflecting investors’ uncertainty over the Trump administration’s ever-changing tariff policy and concerns over exploding federal debt.
The average 30-year mortgage rate remains relatively high so far, slightly above the 7% this year set in mid-January. The low rate for the 30 years this year fell to 6.62% in early April.
High mortgage fees can add hundreds of dollars a month to borrowers, reducing purchasing power. This helped keep the US housing market in a poor sales date back to 2022. This is when mortgage rates began to rise due to the low rock bottom reached during the pandemic.
Last year, sales of previously occupied US homes sank to their lowest levels in nearly 30 years. Last month’s sales fell to the slowest pace in April, dating back to 2009.
The rise in mortgage rates have traditionally helped to reduce sales during the annual peak period of home sales. However, the Mortgage Bankers Association said last week’s mortgage application rose for the first time in four weeks. Mortgage applications have increased 13% from the previous week due to stocks increasing, the group said. Applications have increased by 20% from the previous year.
Other recent data suggest that sales could continue to slow down in the coming months. The pending index for home sales in the US fell 6.3% from March to April and 2.5% from last April, the National Association of Realtors reported two weeks ago.
There is usually a month or two delay between signing the contract and the sale is completed.
Economists expect mortgage rates to remain relatively stable over the next few months, with forecasts sought to keep the average mortgage rate for 30 years in the 6% to 7% range this year.
The borrowing costs for a 15-year fixed-rate mortgage that is popular with homeowners refinanced homeowners’ home loans fell to 5.97% from 5.99% last week. The average year ago was 6.17%, Freddie Mac said.
Original issue: June 12, 2025, 12:18pm EDT
