- Mortgage rates dropped to 6.37% after a five-week rise, Freddie Mac reported on Thursday.
- The decline follows a two-week ceasefire announcement in the Iran war on Tuesday.
- Experts warn the dip may be temporary due to market uncertainties and inflation.
SALT LAKE CITY — Mortgage rates are heading down again, at least for now.
The average rate for a 30-year, fixed-rate mortgage in the United States dropped to 6.37% for the week that ended Thursday, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.
The 0.09 percentage point drop from last week's average rate of 6.46% is the first decline since the U.S. and Israel launched a war against Iran at the end of February. The shift in direction comes after Tuesday's announcement of a two-week ceasefire.
Mortgage rates tracked daily were initially steady at 6.4% for a second day Thursday, then fell to 6.38% in the afternoon, Mortgage News Daily reported. Rates took a similar dip Wednesday then bounced back, due to the "fluid situation" in the financial markets, a post on the site said.
Just before the start of the war that sent global oil prices soaring, mortgage rates were below 6% for the first time since 2022, breaking what is seen as a key psychological barrier for many would-be homebuyers.
But the Freddie Mac site said Thursday's "decrease in rates represents a positive development for prospective homebuyers and could spark a more favorable spring home buying season than last year."
A Wall Street Journal story Thursday was less upbeat, noting that despite "some relief" from rising mortgage rates, it's not clear how long the trend will last.
"There's still uncertainty about what will happen to rates for the remainder of the year," the story said, pointing to market predictions indicating anticipated rate cuts by the Federal Reserve may not be coming.
"Unless something changes in the Middle East and inflation pushes rates down, homebuyers might not see a reprieve in the near future," The Wall Street Journal story stated.
The latest drop in mortgage rates is being described only as "a slight reprieve" by Zillow senior economist Kara Ng. Still, she said March was one of the busiest months in years for pending home sales, possibly because of buyers who locked in lower mortgage rates for a limited time.
Such a scenario, Ng posted Thursday, "underscores how sensitive today's housing market is to small shifts in mortgage rates, and how quickly momentum can build or fade depending on where rates move next."
