The average rate on a 30-year mortgage in the U.S. fell this week for the first time in a month, but borrowing costs for homebuyers remain elevated, the Associated Press reports.
The long-term rate dipped to 6.85% from 6.89% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.99%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also came down. The average rate fell to 5.99% from 6.03% last week and 6.29% a year ago, Freddie Mac said.
The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, set in mid-January. The 30-year rate’s low point this year was in early April when it briefly dipped to 6.62%.
Rising mortgage rates have helped dampen sales during what’s traditionally the peak period of the year for home sales. Mortgage applications fell 3.9% last week from the previous week as home loan borrowing costs rose, according to the Mortgage Bankers Association. Applications for a loan to buy a home are still up 18% from a year earlier.
Recent data suggest sales could slow further in coming months. An index of pending U.S. home sales fell 6.3% in April from March and declined 2.5% from April last year, the National Association of Realtors reported last week.
Economists expect mortgage rates to remain volatile in coming months, with forecasts calling for the average rate on a 30-year mortgage to remain in a range between 6% and 7% this year.
