Mortgage Rates fell this week after President Donald Trump announced a two-week ceasefire between the United States and Iran, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest survey of the primary mortgage market, released Thursday, showed the benchmark’s average rate. Fixed mortgage over 30 years decreased to 6.37% from last week’s reading of 6.46%.
The average rate for a 30-year loan was 6.62% a year ago.
The average rate for a 30-year fixed mortgage has fallen to 6.37%, according to Freddie Mac. (Daniel Acker/Bloomberg via Getty Images)
“The rate cut represents a positive development for potential buyers and could spark a more favorable spring homebuying season than last year,” said Sam Khater, Freddie Mac’s chief economist.
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The average rate on a Fixed mortgage over 15 years fell to 5.74% from last week’s reading of 5.77%.
Mortgage rates are affected by several factors, including Federal Reserve and geopolitics. Although mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield was hovering around 4.26% Thursday afternoon.
The drop in mortgage rates follows two-week ceasefire between the United States and Iran, negotiated with the help of Pakistan, which was presented by the White House as a step towards broader negotiations. Defense officials said U.S. strikes against Iran stopped after Trump’s announcement Tuesday evening.
“As the 10-year Treasury yield began to fall after the announcement of a two-week ceasefire, any relief in mortgage rates could prove short-lived – a temporary pause rather than a real turning point,” said Jiayi Xu, Realtor.com economist. “Until a more permanent solution is found, it is unlikely that the fog of uncertainty will completely clear from the property market.”
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A real estate agent shows a new location to potential buyers. (Getty Images)
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Xu said rates could continue to fall if the Middle East conflict moves closer to a resolution.
“This timeline remains uncertain,” she said. “In other words, mortgage rates don’t just affect monthly payments: They shape buyer confidence, seller motivation and the overall pace of the market, making each rise a potential reason for hesitation during the season that matters most.”
Morgan Phillips of Fox News contributed to this report.
