30-Year Mortgage Rate Falls to 7.24% Amid Easing Treasury Yields

Potential homebuyers in the United States saw a slight decrease in borrowing costs this week. The average rate on a 30-year fixed mortgage dropped to 7.24%, according to data released Thursday by Freddie Mac. This marks the lowest level recorded in over one month. The previous week, the same rate stood at 7.32%.

The decline in mortgage rates follows a trend that began in late February. At that time, the United States started a war with Iran, which increased oil prices and pushed inflation higher. Bond market volatility also rose, driving up yields on U.S. Treasurys. Lenders typically use the 10-year Treasury yield as a guide for pricing home loans, so rising Treasury yields generally lead to higher mortgage rates.

This month, the 10-year Treasury yield has mostly eased. It had climbed to its highest level since 2002 earlier in the month. The yield reached more than 5.30% before settling to 4.98% by midday Thursday. This level remains well above the 3.97% recorded before the war with Iran. As Treasury yields cooled, the average 30-year mortgage rate ticked down from a peak of 7.4% seen earlier this month, which was the highest in nearly three years.

Borrowers seeking 15-year fixed mortgages, a common choice for refinancing, also saw lower rates. That average fell to 6.60% from 6.68% last week. A year ago, the 15-year rate was 5.41%. Similarly, the 30-year rate was 6.17% at this time last year. In late February, the 30-year rate briefly hit 5.98%, its lowest point since late 2022.

The rise in rates since February has added roughly $350 to the monthly payment for a borrower financing a $400,000 home loan. This increase in cost has limited purchasing power for many buyers. U.S. home sales have remained stalled this year as a result. Sales of previously occupied homes were essentially flat last year, staying at a 30-year low.

The housing market has experienced a slump since 2022, when rates began climbing from pandemic-era lows. While the current average rate provides some relief, individual borrowers may qualify for rates below or above the national average depending on their income and credit history.

Freddie Mac tracks these weekly averages to provide a snapshot of the market. The data reflects the ongoing adjustment of mortgage pricing to current economic conditions and government bond movements.