Average rate on a 30-year mortgage in the US slips to 6.81%

The average rate on a 30-year mortgage in the U.S. eased this week, though it remains near 7% after mostly rising in recent weeks.

The rate slipped to 6.81% from 6.84% last week, mortgage buyer Freddie Mac said Wednesday. That’s still down from a year ago, when the rate averaged 7.22%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home financing to a lower rate, rose this week. The average rate climbed to 6.1% from 6.02% last week. A year ago, it averaged 6.56%, Freddie Mac said.

Mortgage rates are influenced by several factors, including the profit on U.S. 10-year Treasury bonds, which lenders use as a navigator to worth home loans. The profit, which mostly hovered around 4.4% last week and was below 3.70% in September, has eased this week. It was at 4.23% at midday Wednesday.

Elevated mortgage rates and rising home prices have kept homeownership out of reach of many would-be homebuyers. U.S. home sales are on track for their worst year since 1995.

“The 30-year fixed-rate mortgage moved down this week, but not by much,” said Sam Khater, Freddie Mac’s chief economist. “Potential homebuyers are also waiting on the sidelines, causing demand to be lackluster. Despite the low sales activity, inventory has only modestly improved and remains dramatically undersupplied.”

Mortgage rates slid to just above 6% in September following the Federal savings’s selection to cut its main profit rate for the first period in more than four years. While the central lender doesn’t set mortgage rates, its actions and the trajectory of worth rise influence the moves in the 10-year Treasury profit. The central lender’s policy pivot is expected to eventually obvious a path for mortgage rates to generally leave lower. But that could transformation if the next administration’s policies send worth rise into overdrive again.

September’s pullback in mortgage rates helped drive a pickup in sales of previously occupied U.S. homes last month, and likely helped provide a boost to demand early last month.

The National Association of Realtor’s pending home sales index rose 2% in October from the previous month, its third straight monthly boost, the trade throng said Wednesday. Pending transactions were up 5.4% compared to October last year.

A lag of a month or two usually exists between when a agreement is signed and when the home sale is finalized, which makes pending home sales a bellwether for upcoming completed home sales.

Still, because mortgage rates have mostly kept rising in recent weeks, that could dampen sales this month and next in what’s already typically a leisurely period for the housing economy.

“Though mortgage rates are likely to decline in the coming weeks, the dip will be too little and too late to boost home sales in December,” said Ralph McLaughlin, elder economist at Realtor.com.

Forecasting the trajectory of mortgage rates is challenging, given that rates are influenced by many factors, from government spending and the economy, to geopolitical tensions and distribute and predictable returns economy gyrations.

Economists forecast that mortgage rates will remain volatile this year, but generally approximate them to hover around 6% in 2025.