Average rate on a US 30-year mortgage eases to 6.81%, hovering near highest level in over two months

The average rate on a 30-year mortgage in the U.S. eased this week, though it remains close to its highest level in more than two months.

The rate fell to 6.81% from 6.83% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.17%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.94% from 6.03% last week. It’s down from 6.44% a year ago, Freddie Mac said.

Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for future inflation.

After climbing to a just above 7% in mid-January, the average rate on a 30-year mortgage has remained above 6.62%, where it was just two weeks ago. It has risen sharply since then, reflecting volatility in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

The yield, which had mostly fallen this year after climbing to around 4.8% in mid-January, spiked earlier this month to 4.5% amid a sell-off in government bonds triggered by investor anxiety over the potential fallout from the Trump administration’s ongoing trade war.

The 10-year Treasury yield was at 4.34% in midday trading Thursday, down from 4.40% late Wednesday.

“The recent back and forth on tariffs and other economic policy has led to market turmoil and a general sense of unease, which can be felt in stubbornly high mortgage rates,” said Hannah Jones, senior economic research analyst at Realtor.com.

Lower mortgage rates help boost homebuyers' purchasing power, but they haven't come down enough to encourage more home shoppers at a time when real estate prices are still rising nationally, albeit more slowly, and the number of properties on the market has risen sharply from a year ago.

The elevated mortgage rates have dampened homes sales so far this spring, traditionally the busiest period of the year for the housing market. Sales of previously occupied U.S. homes fell in March, posting the largest monthly drop since November 2022.

Last week, mortgage applications fell 12.7% from a week earlier, as mortgage rates climbed to their highest level in two months, according to the Mortgage Bankers Association.

“With rates now close to 7%, many potential borrowers will likely stay on the sidelines until they have a better idea of the direction that rates, and the economy, are headed,” said MBA CEO Bob Broeksmit.

Economists expect mortgage rates to remain volatile in coming months, though they generally call for the average rate on a 30-year mortgage to remain around 6.5% this year.