The average rate on a 30-year mortgage in the United States fell for the third straight week, a welcome relief for potential home buyers during what is typically a less competitive time of year for the housing market.
The rate fell to 6.6% from 6.69% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.95%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners looking to refinance their home loan at a lower rate, also fell this week. The average rate fell to 5.84% from 5.96% last week. A year ago, it averaged 6.38%, Freddie Mac said.
The average rate for a 30-year mortgage is now at its lowest level since October 24, when it was 6.54%.
Mortgage rates are influenced by several factors, including changes in the yield on the 10-year U.S. Treasury note, which lenders use as a guide in pricing home loans.
The yield, which was below 3.70% last September, is generally hovering around 4.2% this month. It was at 4.3% Thursday midday.
The recent rate cut follows a mostly upward rise since the average rate on a 30-year mortgage fell to a two-year low of 6.08% in late September after the Federal Reserve lowered its main interest rate to a two-decade high. Although the central bank does not set mortgage rates, its actions and the path of inflation influence the movement of the 10-year Treasury yield.
Many economists and Wall Street traders expect the Fed to cut its main interest rate again at its policy meeting next week.
High mortgage rates and rising home prices have kept homeownership out of reach for many potential buyers. U.S. home sales are on pace for their worst year since 1995.
