30-Year Mortgage Rate Hits 7.24%

The average cost of borrowing on a 30-year fixed-rate home loan dropped to 7.24% this week.

Freddie Mac announced the decline on Thursday. The rate fell from 7.32% the previous week. This marks the lowest level for the benchmark in more than a month.

The 15-year fixed-rate mortgage average also decreased. It moved to 6.60% from 6.68% last week. Borrowers often use the 15-year term to refinance existing loans.

One year ago, the 30-year average sat at 6.17%. The 15-year rate was 5.41% at that time. The current increase adds roughly $350 to the monthly payment for a borrower financing a $400,000 home loan.

Lenders price home loans based on the 10-year Treasury yield. That yield eased this month after climbing to its highest level since 2002. It stood at 4.98% at midday Thursday on the bond market.

Mortgage rates began climbing in late February when the U.S. war with Iran started. The conflict raised oil prices and drove inflation higher. Bond market volatility also contributed to the rise in yields.

The 30-year mortgage rate hit 7.4% earlier this month. That was its highest level in nearly three years. Before the war, the 10-year Treasury yield was 3.97%.

U.S. home sales have remained stalled this year. Rising rates limit purchasing power for buyers. Sales of previously occupied homes were essentially flat last year, stuck at a 30-year low. The housing market has been in a slump since rates began climbing from pandemic-era lows in 2022.