Long-term mortgage rates retreat for second straight week, U.S. average at 7.02%

The average 30-year fixed mortgage rate decreased for the second week in a row, down to 7.02% this week, according to data from Freddie Mac.

The rate marked the second week of decreases for the weekly measure, which fell to 7.09% last week from 7.22% the week prior. During the same time last year, the average was 6.39%.

The slight dips in the average mortgage rate come on the heels of eased inflation and presents a small reprieve for budget-conscious homebuyers.

“Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates,” Sam Khater, chief economist for Freddie Mac, said in a statement Thursday.

“The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers,” Khater said.

The recent decrease comes after five consecutive weeks of increases, which resulted in the highest average since Nov. 30. Increased mortgage rates make buying a home more expensive, adding potentially hundreds of dollars a month in costs for borrowers.

Decreases in the rate come at a good time, as hikes in the average mortgage rate last month came during a typically busy time of the year for Long Island’s real estate market.

“Everyone anticipated that the rates were going to go down,” said Andrew Russell, owner of RCG Mortgage in Hauppauge. Russell said those predictions came true a little later in the year than initially projected.

But for homebuyers, Russell said taking advantage of lower rates may be easier said than done.

“Although on paper rates are trending down, by the time the lenders offer these discounts to the consumers, it’s too late,” he said. “The rates go up faster than they come down.”

Additionally, Russell advises that homebuyers hoping to lock in a lower rate on their mortgages ask if their loan officer has a “float down” policy that would allow them to take advantage of rate decreases later.

Such policies allow buyers to lock in a lower rate but leave open the possibility of locking in a lower rate if rates decrease during the underwriting period.

“In this kind of decreasing rate environment … buyers should make sure they have a pretty robust float down policy,” he said.

For 15-year fixed-rate mortgages — a popular choice with homeowners refinancing their home — the average was 6.28% this week, down from an average of 6.38% last week. The same week last year, the average was 5.75%.

Mortgage rates are influenced by several factors, including bond market reactions to the Federal Reserve’s interest rate policy and the moves in the 10-year U.S. Treasury yield, which lenders use in pricing home loans.

With AP