Mortgage rates have fallen for the first time in six weeks, according to Freddie Mac's latest Primary Mortgage Market Survey released on Thursday. The average rate on the benchmark 30-year fixed mortgage decreased to 6.67% from the previous week's 6.69%. In comparison, the average rate a year ago was 6.58% [1]. The average rate on a 15-year fixed mortgage also declined, dropping to 5.96% from 6.01% the prior week [1].
Sam Khater, Freddie Mac's chief economist, noted that housing affordability has improved compared to a year ago. He also highlighted that recent increases in both purchase and refinance applications indicate borrowers are responding to even modest changes in mortgage rates [1].
Mortgage rates are influenced by several factors, including the Federal Reserve and geopolitical developments. While not directly tied to the Fed's interest rate decisions, mortgage rates closely track the 10-year Treasury yield, which hovered around 4.64% as of Thursday afternoon [1]. Realtor.com senior economist Joel Berner commented that the 10-year Treasury yield increased only slightly this week, as ongoing conflict in Iran has put pressure on oil prices and inflation expectations. Berner also noted that the latest Consumer Price Index (CPI) report was in line with expectations and had little impact on the markets. He added that while the absence of a hotter-than-expected inflation reading is positive, a cooler CPI could have influenced the Federal Reserve's stance on a potential rate hike before the end of 2026, following the Fed's decision to hold rates late last month [1].
CONCLUSION
The decline in mortgage rates marks a positive shift for housing affordability and has prompted increased borrower activity. While market reactions have been muted due to stable inflation data, ongoing geopolitical tensions and Federal Reserve policy remain key factors to watch. The outlook for future rate changes will depend on upcoming economic and geopolitical developments.