By Makailah Gause
NEW YORK (Reuters) - The average rate on the popular U.S. 30-year mortgage rate was little changed near the lowest level in over a year this week, as signs of cooling inflation have held down the Treasury bond yields used in setting home loan costs.
The 30-year fixed-rate mortgage averaged 6.49% during the week ending August 15, up fractionally from 6.47% in the prior week, the lowest since May 2023, mortgage finance agency Freddie Mac said on Thursday.
“In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market," Freddie Mac Chief Economist Sam Khater said in a statement.
"Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
It averaged 7.09% during the same period a year ago.
Mortgage applications increased by nearly 17 percent last week as mortgage rates continued to fall, Mortgage Bankers Association data showed on Wednesday, enticing homeowners who had bought with high-rate mortgages in the last year to rush to refinance those loans.
"The significant increase was led by a 35 percent jump in refinances and also included a 3 percent increase in purchase applications. While the refinances remain strong, we expect that the purchase market will continue to gain momentum as mortgage rates continue to fall,” MBA Chief Executive Bob Broeksmit said in a statement.