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

Core Insights - The average rate on a 30-year U.S. mortgage has decreased to 6.35%, the lowest level in nearly a year, influenced by a pullback in Treasury yields and expectations of an interest rate cut from the Federal Reserve [2][4] - The housing market has been sluggish since 2022, with mortgage rates previously climbing from historic lows, but the recent decline in rates has led to a surge in mortgage applications, reaching a three-year high [2][4] Mortgage Rates - The average rate for 15-year fixed-rate mortgages fell to 5.5% from 5.6% last week, compared to 5.27% a year ago [2] - The yield on 10-year Treasuries was at 4% on Thursday afternoon, which lenders use as a guide for pricing home loans [2] Federal Reserve Influence - The Federal Reserve has maintained its main interest rate this year, focusing on inflation concerns rather than the job market [2] - Recent job market data, including a report of only 22,000 jobs added in August, has fueled speculation about potential rate cuts by the Fed [2] Market Dynamics - The recent decline in mortgage rates has encouraged prospective homebuyers and homeowners looking to refinance, with refinancing applications making up nearly 50% of all mortgage applications last week [4] - If mortgage rates continue to decrease, it could lead to increased competition in the housing market, as more buyers enter the market [4]