Average 30-Year Mortgage Rate Falls to 6.09%

The average long-term mortgage rate dropped to 6.09% from 6.20% last week and 7.19% a year ago, according to Freddie Mac. Meanwhile, rates on 15-year fixed-rate mortgages fell to 5.15%.

WASHINGTON – The average rate for a 30-year mortgage in the U.S. dipped closer to 6% this week, marking its lowest level since early February 2023.

Freddie Mac reported that the rate fell to 6.09%, down from 6.20% last week, and much lower than the 7.19% seen a year ago. The last time rates were this low was February 2, 2023.

For 15-year fixed-rate mortgages, which are popular among homeowners looking to refinance, the average rate dropped to 5.15% from 5.27% last week. A year ago, it stood at 6.54%, according to Freddie Mac.

Mortgage rates are affected by several factors, including the bond market's reaction to the Federal Reserve’s interest rate decisions. These decisions influence the 10-year Treasury yield, which lenders use to set mortgage pricing.

Rates have generally been easing since July, as slowing inflation and a cooling job market led to expectations of a Fed rate cut, pushing the 10-year Treasury yield lower.

On Wednesday, the Federal Reserve cut its main interest rate for the first time in over four years. Officials also indicated that more cuts are likely in 2025 and 2026. These reductions should gradually lead to lower mortgage borrowing costs.

Freddie Mac's chief economist, Sam Khater, believes this drop in rates could drive demand for refinancing and home purchases.

“While mortgage rates don’t directly track Fed movements, this first cut in over four years is bound to influence the housing market,” Khater said. “The recent decline in rates suggests this cut was largely anticipated, but we expect further reductions, which should boost housing activity.”