The average long-term US mortgage rate has fallen to its lowest level in more than a year, offering some relief to homebuyers and homeowners amid a prolonged housing slump.Mortgage buyer Freddie Mac said on Thursday that the average rate on a 30-year fixed mortgage dropped to 6.17% from 6.19% last week — its fourth consecutive weekly decline, AP reported. A year ago, the rate stood at 6.72%, while the last time it was lower was on October 3, 2024, at 6.12%.The average rate on 15-year fixed-rate mortgages, often favoured by homeowners refinancing their loans, also edged down to 5.41% from 5.44%. A year earlier, the rate was 5.99%, according to Freddie Mac.Lower mortgage rates improve homebuyers’ purchasing power and make refinancing more attractive. However, the broader US housing market has been sluggish since mortgage rates began rising above 6% in September 2022, following a long stretch of record lows.Sales of previously owned homes fell last year to their lowest level in nearly three decades. While activity picked up last month — the fastest pace since February — the sector remains under pressure.Mortgage rates typically track the 10-year Treasury yield, which moves with investors’ expectations for inflation and the economy. The yield rose to 4.08% in midday trading Thursday, up from below 4% over the past two weeks.The Federal Reserve this week cut its benchmark interest rate again to support the slowing job market. But Chair Jerome Powell cautioned that another reduction in December is “not a foregone conclusion.”Analysts said the Fed may pause further rate cuts if inflation rises — a risk heightened by the Trump administration’s expanding use of tariffs. Persistent inflation could prompt investors to demand higher returns, lifting Treasury yields and, in turn, mortgage rates.While the Fed does not directly set mortgage rates, its policy moves influence broader borrowing costs. After its first rate cut in four years last fall, mortgage rates had unexpectedly climbed, topping 7% in January this year before easing again.
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