US Mortgage Rates Fall Below 7% for First Time Since Early April

The average for a 30-year, fixed loan was 6.94%, down from 7.02% last week, Freddie Mac said in a statement Thursday. It was the third straight week of declines.

The market normally kicks into high gear during this time of year when warmer weather draws more people out for open houses. But mortgage rates hovering close to 7% and prices that keep climbing are preventing many buyers from being able to afford properties. 

It’s weighing on sales, with transactions for previously owned homes falling in April for a second straight month and new home sales down as well.

The recent easing of rates and a sign that inventory of homes for sale is ticking up may provide some relief to buyers.

“Greater supply coupled with the recent downward trend in rates is an encouraging sign for the housing market,” Sam Khater, Freddie Mac’s chief economist, said in a statement.

Read More: US Existing-Home Sales Unexpectedly Fall as Prices Stay High

The Federal Reserve’s timing on rate cuts largely will depend on how the economy fares. Earlier this month, policymakers agreed that interest rates needed to be higher for longer, while “many” questioned whether policy was restrictive enough to tame inflation to the Fed’s target, according to minutes released this week.

“For rates to fall further below 7%, there must be consistent evidence that inflation is on track to return to 2%,” Jiayi Xu, a Realtor.com economist, said.

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