WASHINGTON—Mortgage rates edged lower as last week ended, offering modest relief to homebuyers, but ongoing geopolitical tensions and economic uncertainty continue to weigh on the U.S. housing market.
Data from Freddie Mac show the average rate on a 30-year fixed mortgage fell to 6.3%, down from 6.37% the previous week. The rate remains below the 6.83% level seen a year ago.
“Compared to one year ago when rates were at 6.83%, this is a meaningful improvement for homebuyers during what is typically the busy spring homebuying season,” Freddie Mac Chief Economist Sam Khater said in a statement.
The average rate on a 15-year fixed mortgage also declined, falling to 5.65% from 5.74% a week earlier, the Freddie Mac data show.
Despite the recent dip, broader housing market conditions remain strained. The National Association of Realtors reported that existing home sales dropped to a nine-month low last month.
“Lower consumer confidence and softer job growth continue to hold back buyers,” NAR Chief Economist Lawrence Yun said in a statement,
Geopolitical Developments Playing Role
Numerous media outlets have pointed to geopolitical developments—particularly tensions involving Iran—as a key driver of recent market volatility. CNN reported that the conflict has contributed to higher borrowing costs and uncertainty, while Fox Business noted that a recently announced two-week ceasefire between the United States and Iran helped ease financial market pressures.
Mortgage rates, which tend to track the 10-year Treasury yield, have followed that trend. Fox Business reported the 10-year yield hovered around 4.29% this week, while CNN noted yields have eased alongside improving market sentiment.
“The 10-year Treasury yield has eased from last week, and this relief has carried through to mortgage rates,” Anthony Smith said, according to Fox Business, while warning that the sustainability of lower rates depends on whether the ceasefire holds.
Challenges Persist
Even with slightly improved borrowing conditions, structural challenges persist. As the CU Daily has been reporting, many homeowners remain reluctant to sell, holding onto lower mortgage rates secured during the pandemic, limiting inventory and keeping prices elevated.
The median U.S. home price reached a record $408,800 in March, though price growth has begun to slow, new data reveal.
