Good news for house hunters: mortgage rates are finally inching in the right direction. The average rate for a 30-year fixed U.S. mortgage dropped to 6.77% this week, marking the lowest level since early May, according to mortgage giant Freddie Mac.
It’s the fourth straight week of decline, a welcome break for buyers sidelined by the high cost of borrowing. While the drop from last week’s 6.81% may seem modest, every dip helps, especially in a housing market still reeling from elevated prices and limited inventory.
For context, a year ago, the same 30-year rate hovered at 6.86%, meaning today’s buyers are seeing slightly better borrowing conditions. Meanwhile, 15-year fixed mortgage rates, often favored by homeowners refinancing, fell to 5.89%, down from 5.96% last week.
High mortgage rates have been a key drag on the housing market since 2022, when the Fed’s inflation-fighting policies sent rates soaring. That spike pushed monthly mortgage payments out of reach for many and drove home sales to their lowest level in nearly three decades.
Now, rates are cooling thanks in part to a dip in the 10-year Treasury yield—a benchmark lenders watch closely when setting loan terms. On Thursday, the yield stood at 4.28%, down from 4.58% just weeks earlier.
Despite this encouraging trend, mortgage rates still hover near this year’s high of just over 7%. The low point so far? A brief dip to 6.62% in early April.
Still, with rates slowly retreating, buyers and refinancers alike may find more breathing room in the weeks ahead, especially if bond yields continue to slide and inflation pressures ease.
