The average U.S. 30-year fixed mortgage rate fell to 6.48% from 6.53% last week, retreating from its highest level in nine months. Mortgage and bond-market moves, tied partly to expectations around the war-related oil shock, are still keeping rates elevated en
For prospective homebuyers, the week started with a small, welcome break in a market that has been pushing costs higher for months. The average U.S. long-term mortgage rate eased to 6.48%, stepping back from its highest level in nine months.
The benchmark 30-year fixed-rate mortgage fell to 6.48% from 6.53% last week, according to Freddie Mac. Even after the dip, the average rate remains below 6.85%, where it was a year ago.
Mortgage rates decline when buyers get more purchasing power—and this latest move offers that relief even as the broader picture stays tense. Rates have mostly been trending higher since the war with Iran began. disrupting the passage of tankers ferrying crude oil from the Persian Gulf to customers worldwide. Oil prices have surged sharply, a key driver of inflation. “This conflict is currently the main driver of still-high mortgage rates. as the oil shock ripples inflation fears throughout the global economy. ” said Joel Berner. a senior economist at Realtor.com.
That conflict link matters because mortgage pricing doesn’t move on headlines alone. Rates are influenced by Federal Reserve interest rate policy decisions and by bond market investors’ expectations for the economy and inflation. Mortgage rates generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide.
Thursday’s bond market reflected that continuing caution. The yield on the U.S. 10-year Treasury note was at 4.47% in midday trading, up from 4.45% a week ago. It was just 3.97% in late February, before the war broke out. As expectations of higher oil prices as the war drags on have kept long-term bond yields elevated. mortgage rates have mostly continued to trend higher.
The latest rate change still comes with a clear memory attached to it: as recently as late February. the average rate on a 30-year mortgage had slipped just under 6% for the first time since late 2022. and it hasn’t fallen below that threshold since. Last week, the rate surged to its highest level since August 28, when it was 6.56%. Now. with rates pulled back slightly. the question for buyers and sellers is whether this is the start of a longer easing—or just a brief pause.
Housing demand has already felt the pressure of uncertainty about how high rates might go next. as bond markets react to the economic fallout from the conflict in the Middle East. Sales of previously occupied U.S. homes were essentially flat in April after declining from a year earlier in the first three months of the year. extending a nationwide housing slump that dates back to 2022. when mortgage rates began to climb from pandemic-era lows. The May existing home sales snapshot is due out next week.
The strain shows up even more directly in mortgage applications. Mortgage applications. which include loans to buy a home or refinance an existing mortgage. fell 2.5% last week for the third week in a row. according to the Mortgage Bankers Association. Applications for loans to buy a home remain modestly higher than last year’s levels. but posted their slowest weekly pace since April. Refinancing applications softened as many homeowners who wanted to refinance held out for lower rates.
Even so, this week brought a bit of reprieve for those refinance plans. Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also eased. The average rate fell to 5.79% from 5.87% last week. A year ago, it was at 5.99%, Freddie Mac said.
If rates are still elevated, the rest of the housing market is at least offering some counterweight. Home shoppers who are undeterred by high mortgage rates are benefiting from buyer-friendly trends in many markets. including more properties for sale than a year ago and data showing that home listing prices have started falling. The median price of U.S. homes listed for sale fell 2.4% last month from a year earlier. the steepest decline on data going back to 2017. according to Realtor.com.
Put together. the picture is mixed: mortgage rates have dipped to 6.48% after earlier sharp moves. but bond yields remain elevated compared with late February. Applications have still been falling for weeks, while price pressure in listings suggests sellers are starting to adjust. For households trying to decide whether the timing is finally right. the hope is that this week’s easing holds long enough to turn hesitation into action.
mortgage rates 30-year fixed Freddie Mac 6.48% U.S. housing market 10-year Treasury yield oil prices war with Iran mortgage applications refinancing 15-year fixed