WASHINGTON — The average interest rate on a 30-year fixed-rate mortgage in the United States has experienced a slight decrease for the second week in a row. Even with this modest drop, however, the costs associated with home loans continue to impose a significant financial burden on potential homeowners.
According to the latest data released by the mortgage lender Freddie Mac, the average rate slipped to 6.84% from the previous week’s 6.85%. Comparatively, the rate was 6.95% just a year back. The adjustment in mortgage rates is typically driven by numerous influences, including the Federal Reserve’s interest rate decisions and economic forecasts from bond market investors.
A critical component in shaping mortgage rates is the 10-year Treasury yield, which serves as a benchmark for lenders when setting the price of home loans. By midday Thursday, the 10-year Treasury yield stood at 4.38%, marking a decrease from 4.58% a few weeks prior.
While bond yields have seen some retreat recently, they generally have been on an upward trajectory since reaching their nadir in early April 2025. This trend reflects investor anxiety surrounding evolving tariff policies and mounting federal debt concerns.
The current trajectory of mortgage rates, which have closely hovered around a high of 7% reached mid-January, continues to shape the housing market. The lowest point for the 30-year rate this year happened in early April, hitting a brief low of 6.62%.
For homebuyers, high mortgage rates can escalate monthly costs considerably, thereby diminishing their buying power. This has perpetuated a slump in U.S. home sales that began in 2022 as rates rose from previous pandemic lows. Last year’s transactions of previously owned homes plummeted to their lowest in nearly three decades, with last month’s April sales being the slowest since 2009.
Despite the typically busy homebuying season, increased mortgage rates have contributed to reduced sales. However, the Mortgage Bankers Association noted a 13% uptick in mortgage applications last week, despite a broader declining trend over the preceding month. The rise has been attributed to an increase in housing inventory, with applications now up 20% from the previous year.
Indicators suggest that home sales might continue to ease in the upcoming months. The National Association of Realtors disclosed a 6.3% reduction in pending home sales for April compared to March, and a 2.5% drop from April 2022. The gap between contract signings and completed sales, usually a month or two, frames pending home sales as a predictive measure for future sales activity.
Economic projections anticipate stability in mortgage rates in the foreseeable future, with predictions positioning the 30-year fixed rate between 6% and 7% for the rest of the year. Furthermore, the costs related to 15-year fixed-rate mortgages, which are favored by homeowners seeking to refinance, have slightly decreased to 5.97% from 5.99% in the previous week. In comparison, the average rate was 6.17% a year prior.