Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage averaged 6.89%, pulling back from the 7% level.
“The 30-year fixed-rate mortgage decreased this week, now averaging 6.89%,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “Mortgage rates have been stable over the last month and incoming data suggest the economy remains on firm footing. Even though rates are higher compared to last year, the last two weeks of purchase applications are modestly above what we saw a year ago, indicating some latent demand in the market.”
The Trump administration wants lower mortgage rates and is less focused on the Federal Reserve’s rate-cutting plans and more on the yield on the Treasury’s 10-year bond, which is the biggest influence on mortgage rates.
Treasury Secretary Scott Bessent said this week that the current strategy is to keep bond yields low.
“The president wants lower rates,” Bessent said in an interview with Fox Business. “He and I are focused on the 10-year Treasury and what is the yield of that.”
The Treasury Department raises the interest rate on bonds to attract investors. When investors’ money flows into bonds, the yield drops. But when the Treasury Department needs to attract more investors it raises the yield.
During the COVID-19 pandemic, the yield on the 10-year note was less than 1%, which is why mortgage rates were around 3%. Today, the yield is 4.43%.
Email Mark Huffman at mhuffman@consumeraffairs.com.