The average interest rate on a 30-year fixed mortgage in the United States fell last week after rising to a nine-month high, providing some relief to prospective homebuyers navigating a challenging housing market.According to Freddie Mac, the US government-sponsored mortgage lender, whose weekly survey is widely viewed as a leading indicator of home loan borrowing costs in the United States, the average interest rate on a 30-year fixed mortgage fell to 6.48 percent from 6.53 percent the week before, the Associated Press reported.Lower mortgage rates generally enhance affordability by lowering borrowing costs and increasing the purchasing power of homebuyers.
However, rates are still high compared to levels seen earlier this year.The recent movement in mortgage rates comes amid continued market concerns about inflation and energy prices. Prices have trended sharply higher since the outbreak of the Iranian conflict, which has disrupted shipping through the Strait of Hormuz, a vital route for global oil supplies.Rising oil prices have increased concerns about inflation, affecting bond markets and borrowing costs.
Mortgage rates are typically shaped by several factors, including Federal Reserve policy, inflation expectations, and movements in long-term Treasury yields.The yield on 10-year US Treasury bonds reached 4.47 percent on Thursday, up slightly from 4.45 percent the previous week. Before the conflict began in late February, the yield was about 3.97 percent.Mortgage rates generally follow the trend of the 10-year Treasury yield, which lenders use as a benchmark when pricing home loans.
Expectations that energy prices may remain high have helped keep long-term bond yields high, limiting the scope for a sharp decline in mortgage rates.Earlier this year, the average interest rate on a 30-year mortgage briefly fell below 6 percent for the first time since late 2022. However, borrowing costs have since risen again, reaching 6.56 percent last week, their highest level since August.The high rate environment continues to impact the US housing market. Sales of previously owned homes were largely unchanged in April after falling year-over-year through the first three months of 2026, continuing a housing slowdown that began in 2022 as mortgage rates moved away from pandemic-era lows.Market participants will get new forecasts on housing demand this week when existing home sales data for May is released.