The average rate on a 30-year mortgage fell this week to its lowest level in more than a year, a welcome affordability boost for prospective home shoppers and homeowners looking to refinance their home loan to a lower rate.
The rate fell to 6.47% from 6.73% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.96%.
This is the second straight weekly drop in the average rate. It’s now the lowest it’s been since mid-May last year, when it was 6.39%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 5.63% from 5.99% last week. A year ago, it averaged 6.34%, Freddie Mac said.
“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move,” said Sam Khater, Freddie Mac’s chief economist. “Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance.”
After jumping to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has mostly hovered around 7% this year — more than double what it was just three years ago.
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers, extending the nation’s housing slump into its third year.
Sales of previously occupied U.S. homes fell in June for the fourth month in a row. And sales of new single-family homes fell last month to the slowest annual pace since November.
Rates have mostly eased in recent weeks as signs of waning inflation and a cooling job market have raised expectations that the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.
Mortgage rates are influenced by several factors, including how the bond market reacts to the central bank’s interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
This week’s drop in mortgage rates follows a pullback in the 10-year Treasury yield, which briefly slid last week to around 3.7% after worse-than-expected labor market data rattled investors, pushing up demand for bonds.
The yield, which topped 4.7% in late April, was at 4% in afternoon trading in the bond market on Thursday.
If bond yields continue to decline in anticipation of the Fed lowering rates this fall, that could lead mortgage rates to ease further, though most economists expect the average rate on a 30-year home loan to remain above 6% this year.
Even so, the recent pullback in mortgage rates has already spurred a surge in homeowners seeking to refinance. Applications for mortgage refinance loans jumped last week to their highest level in two years.
Rates may have to come down more before many would-be homebuyers facing record-high housing prices and a chronic shortage of properties on the market can afford to buy a home.
“Buyers are biding their time, waiting for rates to fall further and for more inventory to come onto the market,” said Lisa Sturtevant, chief economist at Bright MLS.
FILE - A housing development in Cranberry Township, Pa., is shown on March 29, 2024. (AP Photo/Gene J. Puskar, File)
MADISON, Wis. (AP) — Donald Trump's fourth scheduled stop in eight days in Wisconsin is a sign of his increased attention as Republicans fret about the former president's ability to match the Democrats' enthusiasm and turnout machine.
“In the political chatter class, they’re worried," said Brandon Scholz, a retired Republican strategist and longtime political observer in Wisconsin who voted for Trump in 2020 but said he is not voting for Trump or Democratic nominee Kamala Harris this year. “I think Republicans are right to be concerned.”
Trump's latest rally was planned for 2 p.m. Central time Sunday in Juneau in Dodge County, which he won in 2020 with 65% of the vote. Jack Yuds, chairman of the county Republican Party, said support for Trump is stronger in his part of the state than it was in 2016 or 2020. “I can’t keep signs in,” Yuds said. “They want everything he’s got. If it says Trump on it, you can sell it.”
Wisconsin is perennially tight in presidential elections but has gone for the Republicans just once in the past 40 years, when Trump won the state in 2016. A win in November could make it impossible for Harris to take the White House.
Trump won in 2016 over Democrat Hillary Clinton by fewer than 23,000 votes and lost to Democrat Joe Biden in 2020 by just under 21,000 votes.
On Tuesday, Trump made his first-ever visit to Dane County, home to the liberal capital city of Madison, in an effort to turn out the Republican vote even in the state's Democratic strongholds. Dane is Wisconsin’s second most-populous and fastest-growing county; Biden received more than 75% of the vote four years ago.
“To win statewide you’ve got to have a 72-county strategy,” former Gov. Scott Walker, a Republican, said at that event.
Trump’s campaign and outside groups supporting his candidacy have outspent Harris and her allies on advertising in Wisconsin, $35 million to $31 million, since she became a candidate on July 23, according to the media-tracking firm AdImpact.
Harris and outside groups supporting her candidacy had more advertising time reserved in Wisconsin from Oct. 1 through Nov. 5, more than $25 million compared with $20 million for Trump and his allies.
The Harris campaign has 50 offices across 43 counties with more than 250 staff in Wisconsin, said her spokesperson Timothy White. The Trump campaign said it has 40 offices in the state and dozens of staff.
Harris rallied supporters in Madison in September at an even that drew more than 10,000 people. On Thursday, she made an appeal to moderate and disgruntled conservatives by holding an event in Ripon, the birthplace of the Republican Party, along with former U.S. Rep. Liz Cheney of Wyoming, one of Trump’s most prominent Republican antagonists.
Harris and Trump are focusing on Wisconsin, Michigan and Pennsylvania, the “blue wall” states that went for Trump in 2016 and flipped to Biden in the next election.
While Trump’s campaign is bullish on its chances in Pennsylvania as well as Sunbelt states, Wisconsin is seen as more of a challenge.
“Wisconsin, tough state,” said Trump campaign senior adviser Chris LaCivita, who worked on Republican Sen. Ron Johnson’s winning reelection campaign in 2022.
“I mean, look, that’s going to be a very tight — very, very tight, all the way to the end. But where we are organizationally now, comparative to where we were organizationally four years ago, I mean, it’s completely different,” LaCivita said.
He also cited Michigan as more of a challenge. “But again, these are states that Biden won and carried and so they’re going to be brawls all the way until the end and we’re not ceding any of that ground.”
The candidates are about even in Wisconsin, based on a series of polls that have shown little movement since Biden dropped out in late July. Those same polls also show high enthusiasm among both parties.
Mark Graul, who ran then-President George W. Bush’s 2004 campaign in Wisconsin, said the number of campaign visits speaks to Wisconsin’s decisive election role.
The key for both sides, he said, is persuading infrequent voters to turn out.
“Much more important, in my opinion, than rallies,” Graul said.
Associated Press writers Thomas Beaumont in Des Moines, Iowa, and Jill Colvin in Butler, Pennsylvania, contributed to this report.
Republican presidential nominee former President Donald Trump arrives at a campaign event at Dane Manufacturing, Tuesday, Oct. 1, 2024, in Waunakee, Wis. (AP Photo/Charlie Neibergall)
Republican presidential nominee former President Donald Trump speaks at a campaign event at Dane Manufacturing, Tuesday, Oct. 1, 2024, in Waunakee, Wis. (AP Photo/Charlie Neibergall)
Republican presidential nominee former President Donald Trump arrives for a campaign event Saturday, Sept. 28, 2024, in Prairie du Chien, Wis. (AP Photo/Morry Gash)
