But housing costs remain elevated and sales continue to lag
Mortgage rates held steady this week, with the 30-year average inching down to 6.74%, as bond yields remained elevated ahead of the Federal Reserve’s interest rate decision and recent signals that the US economy remains stable.
Freddie Mac reported Thursday that the average rate on a 30-year fixed mortgage dipped slightly from 6.75% the previous week. A year earlier, the rate stood at 6.78%.
The average rate for 15-year fixed mortgages, often selected for refinancing, also declined to 5.87% from 5.92% last week. At this time last year, the 15-year rate was 6.07%.
Mortgage rates have stayed elevated since 2022, when they began raising interest rates from historic lows reached during the pandemic. Higher rates have coincided with slower home sales and rising affordability pressures.
Sales of previously occupied US homes fell to their lowest level in nearly 30 years in 2024 and have remained slow this year. Rising prices and sustained borrowing costs continue to limit access to homeownership for many potential buyers.
Homeowners who locked in lower rates in previous years have largely refrained from listing properties, contributing to low housing inventory.
Mortgage rates are influenced by several factors, including the Federal Reserve’s interest rate policy and investor expectations related to inflation and economic growth. The 10-year Treasury yield, a benchmark used by lenders to set mortgage pricing, stood at 4.41% midday Thursday, slightly down from 4.40% late Wednesday.
Yields have increased for most of July as investors expect the Fed to keep its short-term benchmark rate unchanged at its upcoming meeting. President Donald Trump has publicly called for the Fed to lower interest rates, but market pricing does not suggest an immediate change.
While short-term rates affect consumer borrowing on credit cards and auto loans, mortgage rates are more closely tied to longer-term bond yields, particularly the 10-year Treasury.
The average 30-year mortgage rate has remained close to its highest level so far in 2025, which was just above 7% in mid-January. The lowest point this year came in early April, when the rate briefly declined to 6.62%.
