CLEVELAND, Ohio — U.S mortgage rates have declined slightly for the second straight week, but are still near 7% on average.
The average rate on a 30-year fixed mortgage was 6.95% Thursday, according to Freddie Mac, a government-sponsored home-loan agency. This is down from 6.99% last week and 7.03% the year before. Rates on a 15-year fixed mortgage were 6.17%, down from 6.36% two weeks ago.
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s chief economist.
Khater said that inflation numbers were flat, referring to May’s inflation numbers that were released Wednesday. Year-over-year inflation was 3.3%
But shelter-inflation, which measures rent and the cost of owning a home, increased. Khater said this is “showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”
While interest rates have remained pretty stable, just a small movement means a sizable difference in a monthly payment.
On a fixed rate 30-year loan at 6.95%, a buyer would pay $993 a month in principal and interest for a $150,000 loan. Interest would add up to $207,500 over 30 years.
At 6.62%, where rates started off in 2024, the same loan would be $960 each month and $196,000 in interest over the life of the loan.
This doesn’t include other costs like home insurance, PMI and property taxes.
Average interest on a 30-year mortgage peaked at 7.79% in 2023. Interest rates have skyrocketed since January 2022, when the 30-year rate averaged 3.22%, and a 15-year rate averaged 2.43%.
Sean McDonnell is the business reporter for cleveland.com and the Plain Dealer. You can reach him at smcdonnell@cleveland.com.
