The average long-term US mortgage rate fell this week, tracking Treasury yields that have retreated since a deal to end the war with Iran was announced. The benchmark 30-year fixed rate mortgage rate fell to 6.47% from 6.52% last week, according to mortgage buyer Freddie Mac.

Mortgage Rate Trends

Borrowing costs on 15-year fixed-rate mortgages also came down this week, falling to 5.81% from 5.84% last week. One year ago, the average rate was 5.96%, Freddie Mac said. Mortgage rates are influenced by several factors, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.

With inflation still above the Federal Reserve’s 2% target, officials at the US central bank left the benchmark interest rate unchanged on Wednesday. A number of Fed policymakers said they are willing to consider at least one interest rate hike this year. Rates have been trending higher since the conflict between the US and Iran began in late February, disrupting the flow of crude oil and driving up inflation, bond yields, and mortgage rates.

Housing Market Impact

While average long-term mortgage rates remain lower than they were at this time last year, their upward trajectory and uncertainty over how much higher they may go have kept many would-be homebuyers on the sideline. Sales of previously occupied US homes declined in the first three months of the year compared to a year earlier, extending a nationwide housing slump that dates back to 2022 when mortgage rates began to climb from pandemic-era lows.

Original reporting: KTBS 3 (Shreveport) — read the source article.