Mortgage interest fell below 6% this week for the first time in three and a half years, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average interest rate on the benchmark Mortgage with a fixed term of 30 years fell to 5.98% from last week’s 6.01%.
A year ago, the average interest rate on a 30-year loan was 6.76%. It was last below 6% on September 8, 2022, at 5.89%.
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The average interest rate on a 30-year fixed mortgage fell to 5.98% from 6.01% last week. (David Ryder/Bloomberg via Getty Images)
“This rate, combined with the increasing availability of homes for sale, is meaningful and will drive more potential buyers into the market for the spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist.
The average interest rate on a 15-year fixed mortgage has risen to 5.44% from last week’s 5.35%.
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Mortgage rates are influenced by several factors, including the Federal Reserve and geopolitics. Although mortgage rates are not directly affected by the Fed’s interest rate decisions, they do closely monitor 10-year Treasury yields. The 10-year yield was hovering around 4.02% on Thursday afternoon.
Realtor.com economist Jiayi Xu said the drop in interest rates is the result of the Supreme Court’s ruling against the Trump administration’s use of emergency tariff powers.
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The average interest rate on a 15-year fixed mortgage rose to 5.44% from last week’s 5.35%. (Mike Blake/Reuters)
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“This legal wrangling has triggered a flight to safety among investors, causing bond prices to rise and yields to fall, pushing mortgage rates down to around 6%,” said Xu. “However, since this week’s decline stems from market volatility and not fundamental economic data, more supportive economic data is needed to establish a consistent trend.”
