Long-term mortgage rates ease for third straight week

LOS ANGELES — The average rate on a 30-year mortgage dipped this week to just below 7% for the first time since mid April, a modest boost for home shoppers navigating a housing market dampened by rising prices and relatively few available properties.

The rate fell to 6.94% from 7.02% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.57%.

This is the third straight weekly decline in the average rate. The recent pullbacks follow a five-week string of increases that pushed the average rate to its highest level since November 30. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also declined this week, trimming the average rate to 6.24% from 6.28% last week. A year ago, it averaged 5.97%, Freddie Mac said.

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

Treasury yields have largely been easing since Federal Reserve Chair Jerome Powell said earlier this month that the central bank remains closer to cutting its main interest rate than hiking it.

Still, the Fed has maintained it doesn’t plan to cut interest rates until it has greater confidence that price increases are slowing sustainably to its 2% target.