30-year mortgage rate drops to lowest level in almost a year

"The average rate on a 30-year U.S. mortgage fell this week to its lowest level in nearly a year, reflecting a pullback in Treasury yields ahead of an expected interest rate cut from the Federal Reserve next week.The long-term rate eased to 6.35% from 6.5% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.2%."

"Rates have been mostly declining since late July amid growing expectations that the Fed will cut its benchmark short-term interest rate for the first time this year at the central bank's meeting of policymakers next week.While the Fed doesn't set mortgage rates, its actions can influence bond investors' appetite for long-term U.S. government bonds, like 10-year Treasury notes. Lenders use the yield on 10-year Treasurys as a guide to pricing home loans."

The average 30-year mortgage rate declined to 6.35% from 6.5%, reaching its lowest level in nearly a year. The 15-year fixed-rate average slipped to 5.5% from 5.6%. A year earlier, the 30-year averaged 6.2% and the 15-year was 5.27%. Mortgage rates respond to Federal Reserve policy, bond market expectations, and Treasury yields. Rates have fallen since late July amid growing expectations of a Fed short-term rate cut next week. Lenders reference the 10-year Treasury yield, which stood at 4%, when pricing home loans. Recent weak jobs reports increased speculation about Fed easing.

Read at Fast Company