US home loans ease: Average 30-year mortgage rate drops to 6.3%; borrowing costs at lowest level in a year

The average long-term mortgage rate in the US fell to 6.3% this week, returning to its lowest level in about a year, mortgage buyer Freddie Mac said on Thursday. The rate on a 30-year fixed loan edged down from 6.34% last week, while a year ago it averaged 6.32%.

Rates on 15-year fixed mortgages, often used for refinancing, also eased, slipping to 5.53% from 5.55% last week. A year ago, the 15-year rate stood at 5.41%, AP reported.

Mortgage rates typically follow the 10-year Treasury yield, which guides lenders on home loan pricing. The 10-year yield was at 4.13% at midday Thursday, up from 4.09% last week, after trending higher from 4.02% on September 11.

The drop in mortgage rates comes after weeks of easing in the lead-up to the Federal Reserve ’s first interest rate cut in a year last month amid concerns over the US job market. Fed Chair Jerome Powell has signalled caution on further rate cuts, contrasting with some Fed committee members appointed by President Donald Trump who advocate faster reductions.

Experts note that even if the Fed lowers short-term rates further, mortgage rates may not continue to fall. After the Fed’s rate cuts last year, mortgage rates initially ticked higher, eventually surpassing 7% in January this year.