Mortgage Rates Drop to 7.02%

Prashant Gopal
Bloomberg News
(TNS)

Mortgage rates in the U.S. eased further, relieving some pressure on buyers forging ahead in a tough U.S. housing market.

The average for a 30-year, fixed loan was 7.02%, down from 7.09% last week, Freddie Mac said in a statement Thursday. It’s the fifth-straight week with mortgage rates above 7%.

While the recent pullback helps to ease financing challenges for some buyers, mortgage rates are still double what they were in early 2022. That’s been weighing on the market, with a Redfin Corp. measure of homebuyer demand — which takes into account requests for tours and other services from agents — falling to the lowest level in two months.

“The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

Federal Reserve Chair Jerome Powell said this week that the central bank needs more evidence that higher rates have helped tame inflation pressures. Its push to curb inflation is showing signs of progress, with a measure of underlying U.S. inflation cooling in April for the first time in six months.

“Despite the halt in the upward trajectory of mortgage rates, they remain stubbornly close to 7%,” Realtor.com economist Jiayi Xu said. “To see mortgage rates dip further below 7%, persistent evidence showing inflation back on the path to 2% will be necessary.”

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