30-Year Mortgage Rates Dip, Hovering Near 6.9% Amid Market Volatility
After a volatile period for bond markets, 30-year mortgage rates have marginally decreased but remain close to 6.9%. According to Freddie Mac data, the average 30-year mortgage rate dropped by two basis points to 6.87% this week (through Wednesday) from 6.89% the previous week. The average 15-year mortgage rate rose slightly to 6.09%, up from 6.05%.
Despite hitting a yearly high of 7.04% in mid-January, mortgage rates have remained within a narrow range since then. Market experts anticipate that rates will continue to fluctuate as financial markets react to shifting presidential priorities and economic indicators.
Inflation concerns rose after Wednesday's Consumer Price Index data revealed a surge in January inflation, exceeding the Federal Reserve's 2% target. Interest rate expectations were initially pushed back as ten-year Treasury yields, which influence mortgage rates, responded with a jump. Traders are now expecting a single rate cut this year in December, revising their previous forecast of two cuts.
However, yields fell sharply the following day after President Trump announced reciprocal tariffs on US imports but delayed their implementation. Although the Fed does not directly control mortgage rates, they often fluctuate with anticipated changes in benchmark interest rates.
"Mortgage rates are unlikely to drop significantly anytime soon as investors demand higher returns to compensate for declining purchasing power," said Joel Berner, Senior Economist at Realtor.com. "The era of mortgage rates below 4% is over, and they may not return for a considerable period if inflation remains elevated."
According to the Mortgage Bankers Association, near-7% rates have continued to suppress mortgage applications for home purchases. Purchase applications fell 2% through Friday compared with the previous week, while refinancings increased.