Mortgage rates in US decrease for third week, slipping to 6.89%

MORTGAGE rates in the US dropped for a third straight week, easing pressure on homebuyers.

The average for 30-year loans was 6.89 per cent, down from 6.95 per cent last week, Freddie Mac said.

Homebuyers are getting a slight reprieve as borrowing costs slip further away from the 7 per cent level crossed in early January. But prices remain stubbornly high, squeezing affordability. Weaker demand is causing for-sale homes to linger on the market for the longest span in nearly five years, according to Redfin.

In recent years, buyers have had a dearth of properties to choose from as high borrowing costs discouraged sellers from listing homes and giving up lower rates on their existing loans.

The gridlock is showing signs of easing now. In the four weeks to Feb 2, new listings were up nearly 8 per cent from the same period a year earlier, according to Redfin.

“Though housing costs remain eye-wateringly high, for-sale inventory continues to build, offering home buyers more options,” said Hannah Jones, Realtor.com senior economic research analyst. “Climbing inventory levels have created a bit more slack in the housing market, which is important for market balance.” BLOOMBERG