The average long-term U.S. mortgage rate eased this week, a modest relief for prospective homebuyers who have been facing higher borrowing costs as mortgage rates climbed to the highest level in nearly seven months.
The benchmark 30-year fixed rate mortgage rate dropped to 6.37% from 6.46% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.62%.
Only six weeks ago, the average rate had dropped to just under 6% for the first time since late 2022, an encouraging move for home shoppers just as the spring homebuying season was about to begin. But then the war with Iran began, sending oil prices surging higher and stoking worries about higher inflation.
Those expectations of higher inflation helped push up the yield on 10-year U.S. Treasury bonds, which banks use as a guide to pricing home loans.
The 10-year Treasury yield was at 4.28% in midday trading on the bond market Thursday, down slightly from 4.3% a week ago. The yield was at just 3.97% in late February, before the war with Iran broke out.
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