30-year mortgage rate slips to 7.24%

Freddie Mac reported on Thursday that the average 30-year fixed-rate mortgage fell to 7.24%. This marks a drop from 7.32% recorded the previous week and represents the lowest point in more than a month.

The benchmark rate continues a two-week downward trend. A year ago, the same loan averaged 6.17%. The 15-year fixed-rate mortgage also declined during the period, moving from 6.68% to 6.60%. Borrowers seeking to refinance typically utilize this shorter-term option. That rate was 5.41% at this time last year.

Lenders price home loans based on several variables. These include inflation data, Federal Reserve policy, and investor expectations for the economy. The pricing generally tracks the 10-year Treasury yield. Financial institutions use this yield as a primary guide for setting mortgage costs.

The 10-year Treasury yield stood at 4.98% during midday trading on Thursday. The figure had surged past 5.30% earlier in the month. It remains significantly higher than the 3.97% level observed before the war with Iran began.

The current trajectory of bond market yields directly influences the cost of borrowing for homebuyers. The recent dip in mortgage rates aligns with the current state of the bond market, though the 10-year yield remains elevated compared to pre-conflict baselines.