Mortgage rates fell below 6% this week for the first time in three and a half years, 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 fell to 5.98% from last week’s reading of 6.01%.
The average rate on a 30-year loan was 6.76% a year ago. It was most recently under 6% on Sept. 8, 2022, at 5.89%.
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“This rate, combined with the improving availability of homes for sale, is meaningful and will drive more potential buyers into the market for spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist.
The average rate on a 15-year fixed mortgage increased to 5.44% from last week’s reading of 5.35%.
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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 4.02% as of Thursday afternoon.
Realtor.com economist Jiayi Xu said the dip in rates comes in the wake of the Supreme Court’s ruling against the Trump administration’s use of emergency tariff powers.
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“This legal tug-of-war has triggered a flight to safety among investors, pushing bond prices higher and yields lower, helping mortgage rates settle around 6%,” Xu said. “However, as this week’s decline stems from market volatility rather than fundamental economic data, more supportive economic data is needed to establish a consistent trend.”
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