Understanding the Recent Decrease in Mortgage Rates
According to Freddie Mac, mortgage rates just experienced their second consecutive week of decline. This information comes from Freddie Mac’s most recent Primary Mortgage Market Survey.
The Effects on 30-Year Fixed Mortgages
The survey shows that the average rate for a benchmark 30-year fixed mortgage has decreased from 6.67% in the previous week to 6.65%. This subtle decline might seem negligible, but it’s important to note that the average rate on a 30-year loan stood at 6.58% just a year ago.
Sam Khater, Freddie Mac’s chief economist, suggests that this slight decrease in rates might provide some relief for homebuyers. He recommends that borrowers could potentially save thousands by shopping around for the best mortgage rate.
A real estate agent sets up for an open house in Rancho Cucamonga, California, on May 9, 2026. (Kyle Grillot/Bloomberg via Getty Images)
Changes in 15-Year Fixed Mortgages
The average rate of a 15-year fixed mortgage has also seen a drop, moving from 5.96% to 5.95% in the last week.
What Causes Fluctuations in Mortgage Rates?
Mortgage rates are influenced by various factors, including decisions made by the Federal Reserve and geopolitical events. While the Fed’s interest rate decisions do not directly affect mortgage rates, they often correlate with the 10-year Treasury yield. As of Thursday afternoon, the 10-year yield was around 4.7%.
Despite mortgage rates’ recent drop, experts like Jake Krimmel, a senior economist at Realtor.com, anticipate that market volatility may push rates higher next week. Krimmel points out that most mortgage holders refinance or move within seven to ten years, so mortgage rates are most closely tied to the 10-year Treasury yield.
Recent yields on U.S. Treasurys have been high, partly due to growing debt, with the Congressional Budget Office (CBO) projecting a federal budget deficit of around $2.1 trillion for this fiscal year. Two Treasury auctions last week resulted in yields at historic levels – a 10-year note cleared at a high of 4.683%, the highest in 19 years, while a 30-year bond auction closed at a 25-year peak of 5.216%.
Read More US Economic News