Mortgage Rates Fall for Second Consecutive Week as Spring Homebuying Season Begins

In a positive development for prospective homebuyers, home loan borrowing costs dropped for the second consecutive week, bringing the average long-term U.S. mortgage rate to its lowest level since early February. According to mortgage buyer Freddie Mac, the average rate on a 30-year mortgage decreased to 6.74% from 6.88% the previous week, although still higher than the 6.60% rate recorded a year ago.

This decline in rates comes after a period of rate increases, driven by stronger-than-expected reports on inflation and the economy, which had led to speculation that the Federal Reserve would delay cutting interest rates. However, the recent pullback in rates aligns with the Fed’s indication that it may cut its key interest rate this year, contingent on sustainable decreases in inflation.

Economists expect that mortgage rates will ease further this year, though most forecasts have the average rate on a 30-year mortgage going no lower than 6% by the end of the year. This potential downward trend in rates later this spring could bring more buyers and sellers into the market, providing a boost to the housing sector.