Mortgage rates declined this week, falling below 7%

After weeks of steady increases, the average mortgage rate fell slightly this week - Image (c) ConsumerAffairs

It’s the first drop in rates in six weeks

After rising for several weeks, mortgage rates have dipped slightly this week. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.96% this week, down from 7.09%.

It’s finally a bit of good news for homebuyers ahead of the start of the spring housing market.

“After crossing the 7%-mark last week, the 30-year fixed-rate mortgage saw its first decline in six weeks,” Sam Khater, Freddie Mac’s chief economist, said in a statement. 

“While affordability challenges remain, this is welcome news for potential homebuyers, as reflected in a corresponding uptick in purchase applications.”

According to the Mortgage Bankers Association, interest in taking out a mortgage rose last week despite elevated interest rates. MBA reports the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.02% percent from 7.09% percent, with points decreasing to 0.62 from 0.65 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

Mortgage rates are keyed to the yield on the 10-year Treasury bond, which declined slightly this week. Further declines could lower mortgage rates heading into spring.