Bank of America(US:BAC) Fastcompanyยท2025-09-17 19:00Core Viewpoint - The average 30-year fixed mortgage rate has recently declined, reaching a calendar-year low of 6.35%, with expectations for further decreases due to various market factors [2][3]. Group 1: Mortgage Rate Trends - The average 30-year fixed mortgage rate has edged down in recent months, influenced by a compression of the mortgage spread and a renewed investor interest in mortgage-backed securities (MBS) [3][4]. - The daily rate reported by Mortgage News Daily was 6.13%, indicating potential for further declines in the coming weeks [2]. Group 2: Economic Influences - Softer-than-expected labor market data and expectations of a shift in Federal Reserve policy from restrictive to neutral have contributed to downward pressure on mortgage rates [4]. - Analysts at Bank of America project that the average 30-year fixed mortgage rate could end 2025 at 6.25%, suggesting that much of the anticipated decline is already factored in [5]. Group 3: Future Projections - A path to a 5% mortgage rate could emerge if the Federal Reserve engages in MBS quantitative easing and yield curve control, potentially lowering the 10-year Treasury yield to 3.00%-3.25% [6]. - A significant economic downturn could lead to a flight to safety, increasing demand for Treasuries and further lowering mortgage rates [8]. - Bank of America believes that a drop to a 5% mortgage rate would likely occur in response to negative economic conditions or a change in central bank policy regarding MBS purchases [9].