Mortgage rates in the US decreased for the second week in a row, reaching a four-month low.
(Bloomberg) — Mortgage rates in the US decreased for the second week in a row, reaching a four-month low.
The average for a 30-year, fixed loan fell to 6.15% from 6.33% last week, Freddie Mac said in a statement Thursday.
Last year’s run-up in borrowing costs cooled the US housing market significantly after the pandemic boom, driving new US home construction down for four straight months through December. But the market is starting to show signs of life amid a recent easing of mortgage rates, with loan applications ticking up and homebuilder confidence rising for the first time since the end of 2021.
“Rates are at their lowest level since September of last year, boosting both homebuyer demand and homebuilder sentiment,” said Sam Khater, Freddie Mac’s chief economist. “Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern.”
Buyers are still facing a drastically different housing market than a year ago. At the current 30-year average, a borrower with a $600,000 mortgage would pay roughly $3,655 a month, about $940 more than a year ago, when rates were 3.56%.
“While recent lower mortgage rates have improved homebuyers’ sentiment slightly, they remain more than twice as high as they were one year ago, and still create financial barriers for many buyers, especially first-time homebuyers,” said Jiayi Xu, a Realtor.com economist.
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