The average rate on a 30-year U.S. mortgage has fallen to its lowest level in four months, welcome news for prospective homebuyers who have been held back by stubbornly high home financing costs.
The long-term rate fell to 6.63% from 6.72% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.47%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.75% from 5.85% last week. A year ago, it was 5.63%, Freddie Mac said.
Elevated mortgage rates have helped keep the U.S. housing market in a sales slump that began in early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years.
For much of 2025, the average long-term mortgage rate has remained relatively close to the 7.04% high for this year that it reached in mid-January.
This is the third week in a row that rates have come down. The latest average rate on a 30-year mortgage is now just shy of 6.62%, the low point for this year set April 10.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation.
The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.23% at midday Thursday, up slightly from 4.22% late Wednesday.
The yield is well below where it was last week, before Friday’s weaker-than-expected report on the U.S. job market ignited worries that the Trump administration’s tariffs are stalling hiring plans by employers.
Last Wednesday, the central bank’s policymaking committee voted to hold its main interest rate steady. And Fed Chair Jerome Powell pushed back on expectations that the Fed could cut rates at its next meeting in September, noting that inflation remained above the Fed’s 2% target and the job market was “in balance.”
But the latest jobs report may shift that stance. Traders on Wall Street are now betting heavily that the Fed will need to cut interest rates next month, something Trump has been demanding the Fed, and Powell specifically, to do.
A cut in rates could give the job market and overall economy a boost, but it could also fuel inflation just as Trump’s tariff policies risk raising prices for U.S. consumers.
“While both buyers and sellers welcome lower mortgage rates, it’s not clear whether rates will continue to fall,” said Lisa Sturtevant, chief economist at Bright MLS. “A weaker economy could lead to lower mortgage rates, but the risks of higher inflation could keep rates elevated.”
