Mortgage rates inched lower this week, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage slipped to 6.09% from last week’s reading of 6.11%.
The average rate on a 30-year loan was 6.87% a year ago.
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“Bolstered by strong economic growth, a solid labor market and mortgage rates at three-year lows, housing affordability continues to measurably improve,” said Sam Khater, Freddie Mac’s chief economist. “These factors have caught the attention of many prospective homebuyers, driving purchase application activity higher than a year ago.”
The average rate on a 15-year fixed mortgage fell to 5.44% from last week’s reading of 5.5%.
Mortgage rates are affected by several factors, including the Federal Reserve and geopolitics. Though mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield hovered around 4.1% as of Thursday afternoon.
“Mortgage rates have lingered in the low-6% range for weeks, letting buyers and sellers who were already prepared take action, but likely not low enough to entice the next wave,” Realtor.com Economist Jiayi Xu. “While active listings continued to rise year-over-year in January, inventory growth has slowed for the ninth consecutive month, leaving total supply still about 17.2% below pre-pandemic levels.”
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“In short, while the market remains stable, a larger drop in rates will be needed to attract new buyers and sellers and truly reignite the housing market,” Xu added.
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U.S. existing home sales tumbled to the lowest level in more than two years in January as falling inventory raised house prices.
Home sales dropped 8.4% last month to a seasonally adjusted annual rate of 3.91 million units, the lowest level since December 2023, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home resales declining to a rate of 4.18 million units.
Last month’s sales likely reflected contracts that were signed in November and December, and would not have been impacted by winter storms that slammed large parts of the country in January. Home sales decreased 4.4% on a year-over-year basis.
Reuters contributed to this report.
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