Mortgage Rates Down 5th Week in a Row

The average long-term US mortgage rate has decreased for the fifth consecutive week, providing relief for potential homebuyers and a real estate market that has been negatively affected by the Federal Reserve's interest rate hikes over the past year.

Freddie Mac, a mortgage buyer, reported that the benchmark 30-year rate has slightly decreased from 6.28% to 6.27% compared to the previous week. The average rate at this time last year was 5%.

Although the supply of homes remains low, the slight decrease in home prices and a reduction in borrowing costs can entice buyers to re-enter the market. The median home price decreased 0.2% from February last year to $363,000, indicating the first annual decline in 13 years. Rising borrowing costs have led to a reduction in sales, with sales of existing homes falling for 12 straight months to the slowest pace in over a decade.

According to the National Association of Realtors, existing US home sales from 2021 decreased by 17.8%, marking the largest annual decline since the housing crisis began in 2008. The Federal Reserve's rate hikes have an impact on borrowing rates for businesses and families, but rates on 30-year mortgages usually follow the moves in the 10-year Treasury yield. Investor expectations for future inflation, global demand for US Treasuries, and the Federal Reserve's interest rate decisions can all impact borrowing costs.

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