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U.S. mortgage rates fell slightly to 6.51% for the 30-year fixed-rate loan, the first decrease since the Iran conflict began, but the shift has not significantly improved conditions for buyers dealing with high costs and expensive homes. Refinancing declined, and purchase applications remain below last year's levels. Rising Treasury yields and increased fuel costs have added to financial pressure. Housing affordability remains a political focus, with the Trump Administration preparing a major policy announcement, building on earlier proposals to limit institutional home purchases and boost mortgage-backed securities purchases to lower borrowing rates.
The interest rate on the most common U.S. home loan edged down last week, marking the first decline since the conflict in Iran began, though the change is unlikely to significantly ease pressure on buyers facing high borrowing costs and expensive homes. According to the Mortgage Bankers Association (MBA), the contract rate on a 30-year fixed-rate mortgage fell by 6 basis points to 6.51% for the week ending April 3, after hitting a seven-month high the previous week. Advertisement
Despite the small drop, refinancing activity fell 2.8%, while purchase applications rose slightly by around 1% compared to the prior week, remaining 7% below levels from a year ago. Mortgage rates have risen by 42 basis points since the U.S. and Israel launched military action on February 28, driven by higher yields on Treasury bonds that lenders use to set mortgage rates.
The conflict has also affected household budgets through increased fuel costs, adding to financial strain for prospective homeowners. Housing affordability has emerged as a significant political concern, prompting the Trump Administration to plan a major announcement on housing policy. Earlier this year, President Trump suggested restricting institutional investors from buying single-family homes and instructed Fannie Mae and Freddie Mac, which back most U.S. home loans, to purchase USD 200 billion in mortgage-backed securities to lower borrowing costs.
Source Reuters
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