Average US long-term mortgage rate hits the lowest point in more than 3 years

The average long-term U.S. mortgage rate is now down to its lowest level in more than three years. The benchmark 30-year fixed rate mortgage eased to 6.06%, down from 6.16%, mortgage buyer Freddie Mac said. One year ago, the rate averaged 7.04%. The last time the average rate was lower was September 15, 2022, when it was at 6.02%. Meanwhile, borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell, dropping to 5.38% from 5.46% last month. A year ago, that average rate was at 6.27%, Freddie Mac said. Lower mortgage rates boost homebuyers' purchasing power, good news for home shoppers at a time when the housing market remains in a deep slump after years of soaring prices and elevated mortgage rates have shut out many aspiring homeowners. Uncertainty over the economy and job market is also keeping many would-be buyers on the sidelines. Mortgage rates began easing in July in anticipation of a series of Fed rate cuts, which began in September and continued last December. The Fed doesn't set mortgage rates, but when it cuts its short-term rate, that can signal lower inflation or slower economic growth ahead, which can drive investors to buy U.S. government bonds. That can help lower yields on long-term U.S. Treasurys, which can result in lower mortgage rates. The pullback in mortgage rates helped drive sales of previously occupied U.S. homes higher on a monthly basis for the last four months of 2025. Even so, home sales remained stuck at a 30-year low last year, extending the housing market's slump into its fourth year. Lower mortgage rates have been helpful for home shoppers who can afford to buy at current rates. The median U.S. monthly housing payment fell to $2,413 in the four weeks ending January 11, according to Redfin. That's a 5.5% drop from the same period a year earlier and near the lowest level in two years. This article was provided by The Associated Press.