Mortgage rates ease again

A daily dip in long term mortgage rates offers limited relief for buyers amid inflation and policy uncertainty.

Mortgage rates fall to 6.58 percent boosting buying power

The average rate on a 30 year fixed mortgage slipped to 6.58% this week, down from 6.63% last week, Freddie Mac said. The 15 year fixed rate also declined to 5.71% from 5.75%. A year ago, the 30 year rate averaged 6.49%. This marks the fourth straight weekly decline and the lowest level since Oct 24. Mortgage rates are influenced by several factors, including Federal Reserve decisions, bond market movements, and inflation expectations. The 10 year Treasury yield was around 4.29% at midday Thursday, up from 4.24% the day before. The reopening of policy discussions around a possible Fed rate cut has added to price movement in recent weeks, even as inflation signals remain mixed.

The small fall in rates gives buyers a narrow window of relief, but it does not solve fundamentals. Prices for existing homes remain high and supply is uneven, keeping affordability fragile. The broader market could hinge on whether inflation cools and the Fed sticks to a cautious path. If inflation accelerates, rates could rebound even with any near term rate cuts, tempering any initial boost to demand. The pull of higher prices and debt service costs will still restrain many households, especially first time buyers.

Highlights

Rate moves may shift again as inflation data and policy signals evolve