Average long-term mortgage rate eases to 6.71%

By A LEX VEIGA Associated Press

LOS ANGELES — The average long-term U.S. mortgage rate eased back from a seven-month high this week, a welcome change for homebuyers navigating high borrowing costs and heightened competition for relatively few homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan fell to 6.71% from 6.79% last week.

A year ago, the rate averaged 5.23%.

The pullback follows three straight weekly increases, which pushed up the average rate to its highest level since early November, when it climbed to 7.08%.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also fell this week, slipping to 6.07% from 6.18% last week. A year ago, it averaged 4.38%, Freddie Mac said.

High rates can add hundreds of dollars a month in costs for homebuyers, limiting how much they can afford in a market that remains out of reach to many Americans after years of soaring home prices.

They also discourage homeowners who bought their home or refinanced in recent years when rates on a 30-year mortgage were around 3% from selling now that rates have roughly doubled.

That’s one reason the number of homes on the market remains near historic lows.

“While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective homebuyers,” said Sam Khater, Freddie Mac’s chief economist.