LOS ANGELES (AP) 鈥� The average rate on a 30-year mortgage in the U.S. eased for the seventh straight week, a trend that gives prospective homebuyers more financial flexibility just as the spring homebuying season gets going. The rate fell to 6.63% from 6.76% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.88%. The average rate briefly fell to a 2-year low of just above 6% last September, but remains more than double the 2.65% record low from early 2021. The pullback in mortgage rates this year hasn鈥檛 improved the affordability equation for many would-be homebuyers, keeping the housing market in a sales slump.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
LOS ANGELES (AP) 鈥� Mortgage rates have been , helping encourage prospective home shoppers just as the spring homebuying season gets going.
But the same factors that have pulled mortgage rates to their lowest level since December 鈥� signs that the U.S. economy is slowing and uncertainty over the potential fallout from the Trump administration's tariffs on imports 鈥� are clouding the outlook for where mortgage rates will go from here.
鈥淲e do not anticipate significant relief from high mortgage rates in the near future because of inflation remaining stubbornly high, which will not be helped by the tariffs that the Trump administration appears committed to rolling out,鈥� said Joel Berner, senior economist at Realtor.com.
The average rate on a 30-year mortgage in the U.S. has declined six weeks in a row from 7.04% in mid-January to 6.76% last week, according to mortgage buyer Freddie Mac. A year earlier, it averaged 6.94%.
The average rate is now at its lowest level since Dec. 19, when it was 6.72%. It briefly fell to a 2-year low last September, but remains more than double the 2.65% record low the average rate hit a little over four years ago.
Mortgage rates are influenced by several factors, including bond market investors鈥� , global demand for U.S. Treasurys and the decisions.
The recent decline in mortgage rates echoes moves in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.
The yield, which was at 4.79% in mid-January, has been mostly easing since then, reflecting worries about the economy鈥檚 growth and the potential impact from the Trump administration's decision
While one could say the bond market jitters have ultimately benefited home shoppers by leading to lower mortgage rates, the trajectory for rates from here is far from certain.
Tariffs can drive inflation higher, which could translate into higher yields on the 10-year Treasury note, pushing up mortgage rates. That鈥檚 because bond investors demand higher returns as long as inflation remains elevated.
And then there鈥檚 the Fed, which has signaled a more cautious approach as it gauges where inflation is headed and what policies the Trump administration will pursue.
So far, the steady decline in mortgage rates this year hasn鈥檛 been enough to drive home sales higher. as rising mortgage rates and prices froze out many would-be homebuyers despite a wider selection of properties on the market.
Pending home sales, a bellwether for future completed sales, point to potentially further sales declines in coming months.
Still, last week, mortgage applications jumped 20.4% from the previous week, according to the Mortgage Bankers Association. And a measure of home loan refinancing applications surged 37%, the MBA said.
While a pickup in mortgage applications is typical for this time of year, the sharp increase is a signal that mortgage rates have fallen enough to spur some buyers off the fence.
The pullback in rates comes at a good time for home shoppers. The inventory of homes on the market has risen sharply from a year ago and prices are rising more slowly nationally and declining in many metropolitan areas, such as Austin, Dallas and Tampa, Florida.
Still, more attractive mortgage rates may not be enough to motivate home shoppers if the economy and labor market worsen.
鈥淚nflation is still a problem, but now the economy is starting to show signs of weakness,鈥� said Daryl Fairweather, chief economist at Redfin. 鈥淲hat that means to the housing market is that those two factors make buyers more reluctant to jump into the market.鈥�
Alex Veiga, The Associated Press
