AP Business Writer Alex Veiga
This week, the average US 30-year mortgage rate was extended, bringing home buyers’ borrowing costs down five weeks.
Mortgage buyer Freddie Mac said Thursday that long-term fees reached up to 6.72% from 6.67% last week. A year ago, the price averaged 6.89%.
The borrowing costs for 15-year fixed-rate mortgages, which are popular for homeowners to refinance their mortgage, have also risen. The average rate rose to 5.86% from 5.80% last week. A year ago, that was 6.17%, Freddie Mac said.
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. Many future home buyers have been slowing so far this year as they are disappointed by the slow, but still rising mortgage rates and home prices.
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. Yield rose from 4.37% on Thursday at noon, up from 4.34% on Wednesday.
Last week, yields rose as they bet that a June employment report, which was better than expected, could hold the Fed on interest rates.
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.
As mortgage fees have been eased over the past few weeks, more home shoppers have been encouraged to enter the market. Mortgage applications have increased 9.4% from last week, according to the Mortgage Bankers Association.
Economists generally expect mortgage rates to remain relatively stable over the next few months, with forecasts hoping to keep the average 30-year mortgage rate in the 6% to 7% range this year.
“Mortgage rates could fall modestly in the coming months, but other economic headwinds – including prices for consumer goods, lower labor market conditions and rising consumer debt – could continue to hold the housing market in the second half of 2025.
Original issue: July 10th, 2025, 12:07pm EDT
