Mortgage rates in US drop for first time in more than a month

US MORTGAGE rates declined for the first time since the middle of December, dipping below 7 per cent.

The average for 30-year loans slipped to 6.96 per cent, down from 7.04 per cent last week, Freddie Mac said.

The drop “will hopefully calm the fears of prospective buyers who had watched mortgage rates climb for five consecutive weeks, encouraging them that more stability is ahead”, said Joel Berner, a senior economist at Realtor.com.

Homebuyers are still facing intense affordability challenges. Borrowing costs are hovering close to the highest level in months and purchase prices are continuing to rise. House hunters are pulling back, leaving properties to linger on the market longer, according to Redfin.

Yields on 10-year Treasuries had been rising in recent weeks on fears that President Donald Trump’s policies, including tariffs, would stoke inflation. But Trump’s recent tariff announcements were seen by some investors as more mild than feared, helping to stabilise rates.

“The 10-year Treasury yield has levelled out since its surge in the first half of January, and we hope to see mortgage rates do the same as debt market investors gain some steadier footing in the early days of the new Trump administration,” said Realtor.com’s Berner. BLOOMBERG