Mortgage Rates Dip Below 7% Again

30 Year Fixed Mortgage Rate Averages Changing

A 30-year, fixed-rate mortgage averaged 6.95%, down from last week’s 7.08%, though drops are likely temporary after the Fed boosted interest rates earlier this week.

WASHINGTON (AP) – The average long-term U.S. mortgage rate dipped back under 7% this week, one day after the Federal Reserve raised its benchmark borrowing rate to its highest level in 15 years as it tries to squelch four-decade high inflation.

Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate fell to 6.95% from 7.08% last week. The rate was 3.09% last year at this time.

The rate for a 15-year term, often used by those refinancing their homes, fell to 6.29% this week from 6.36% last week. One year ago, it was 2.35%.

Its key rate now stands in a range of 3.75% to 4%, with more increases likely on the horizon.

Consumer prices remained stubbornly high at 6.2% year-over-year in September, the same as the previous month.

While rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. That yield is influenced by a variety of factors, including investors’ expectations for future inflation and global demand for U.S. Treasury.

FAQs

What is the current average rate for a 30-year, fixed-rate mortgage?

As of this week, the average rate for a 30-year, fixed-rate mortgage is 6.95%, down from last week’s 7.08%.

How does this compare to last year’s rates?

Last year at this time, the average rate for a 30-year mortgage was 3.09%, significantly lower than the current rates.

What is the current average rate for a 15-year mortgage?

The average rate for a 15-year mortgage fell to 6.29% this week, down from 6.36% last week. A year ago, this rate was 2.35%.

Why did mortgage rates drop this week?

The dip in rates is likely a temporary fluctuation despite the Federal Reserve’s recent increase in its benchmark interest rate. Mortgage rates often track the yield on the 10-year Treasury note, which can be influenced by various factors, including inflation expectations and global demand for U.S. Treasurys.

How does the Federal Reserve’s interest rate increase affect mortgage rates?

While mortgage rates don’t directly mirror the Federal Reserve’s rate hikes, the Fed’s actions can indirectly influence them.

What impact have higher mortgage rates had on the housing market?

Higher rates, combined with elevated home prices, have significantly reduced homebuyers’ purchasing power, leading to a decline in existing home sales for eight consecutive months.