Mortgage Rates Drop to 6.94%: 30-Year Fixed Rates Fall on Lower Treasury Yields

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Mortgage Rates Decline: 30-Year Fixed Rates Hit 6.94% Amid Falling Treasury Yields

Team FS

19/Jun/2024

Key Points:

30-Year Fixed Rates: Fell sharply to 6.94% from 7.02% as Treasury yields decreased.
Jumbo Loans: Declined to 7.12% from 7.18%, reflecting broader market trends.
FHA Loans: Lowered to 6.79% from 6.87%, offering competitive rates for homebuyers.
Market Impact: Mortgage rates respond to slowing US inflation, influencing borrowing costs.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dropped sharply to 6.94% in the week ending June 14th, 2024, according to data from the Mortgage Bankers Association. This decline marks the lowest level since late March, driven by a decrease in Treasury yields following a slowdown in US inflation.

30-Year Fixed-Rate Mortgages

Mortgage rates for conforming loans saw a significant decrease from 7.02% in the previous period to 6.94%. This reduction is attributed to the retreat in Treasury yields, which influence mortgage rates as lenders adjust borrowing costs in response to changes in bond markets.

Jumbo Loans

Similarly, the average rate for jumbo loans, applicable to homes priced above $766,550, fell to 7.12% from 7.18%. Jumbo loans typically reflect higher rates due to their larger loan amounts, but they too benefited from the broader decline in interest rates.

FHA-Backed Mortgages

Meanwhile, the average rate for 30-year mortgages backed by the Federal Housing Administration (FHA) decreased to 6.79% from 6.87%. FHA loans remain an attractive option for homebuyers seeking competitive rates with government-backed assurances.

Market Influences

The decrease in mortgage rates aligns with the overall trend in falling Treasury yields, which were prompted by unexpected deceleration in US inflation. Lower inflation expectations can lead to reduced borrowing costs across various loan categories, including mortgages, as investors seek safer assets like bonds.

Conclusion

The latest decline in mortgage rates to 6.94% for 30-year fixed-rate loans reflects favorable market conditions following a drop in Treasury yields. Homebuyers and refinancers can benefit from these lower rates, supported by easing inflation pressures and ongoing economic indicators influencing interest rate movements. As market conditions evolve, monitoring Treasury yield trends will continue to be crucial for predicting future mortgage rate changes.

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Mortgage Rates Decline: 30-Year Fixed Rates Hit 6.94% Amid Falling Treasury Yields

Key Points:

Conclusion

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