Average long-term US mortgage rate falls to 6.35% this week, lowest level in 5 weeks

LOS ANGELES (AP) — The average long-term U.S. mortgage rate fell this week to its lowest level in five weeks, welcome news for house hunters looking for an edge as they navigate a housing market constrained by a near-historic low number of homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan fell to 6.35% from 6.39% last week. The average rate a year ago was 5.30%.

The average benchmark rate has now edged lower seven of the last nine weeks since reaching a high for this year of 6.73% in early March.

“This week’s decrease continues a recent sideways trend in mortgage rates, which is a welcome departure from the record increases of last year,” said Sam Khater, Freddie Mac’s chief economist. “While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023. This should bode well for the trajectory of mortgage rates over the long-term.”

High rates can add hundreds of dollars a month in costs for homebuyers on top of already high home prices. The elevated rates combined with a stubbornly low inventory of homes on the market have weighed on U.S. home sales this spring homebuying season.

Sales of previously occupied U.S. homes fell 22% in the 12 months ended in March, marking eight straight months of annual sales declines of 20% or more.

“The decline in mortgage rates is good news for prospective homebuyers, but housing supply is still too low in many parts of the country,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “Housing construction has slowed, and some would-be sellers are delaying decisions because of economic uncertainty and an unwillingness to give up their low-rate mortgage.”

Many prospective homebuyers have been pushed to the...