Borrowing costs for U.S. homebuyers continued their downward slide, with the benchmark 30-year fixed mortgage rate falling to 6.23 percent from 6.3 percent a week earlier, according to data released Thursday by Freddie Mac. The rate stood nearly six-tenths of a percentage point below its level of 6.81 percent a year ago.
The sustained decline marks a reprieve for a housing market still adjusting to the volatility that followed the outbreak of the Iran conflict in late February. That escalation sent rates higher as investors priced in the odds of the Fed delaying interest rate cuts, temporarily stalling momentum in what is typically the busiest stretch of the year for home sales.
There are tentative signs the market is finding its footing. Pending sales of existing homes rose for a second consecutive month in March, the National Association of Realtors reported, though activity remained below year-ago levels — a reminder that high prices and still-elevated rates continue to weigh on demand.
The question facing the housing sector is whether the current trajectory can hold. Mortgage rates remain well above the sub-5 percent levels that prevailed before the Federal Reserve’s tightening campaign, and elevated home prices in many metros continue to stretch household budgets. A durable decline in rates would likely hinge on broader progress in cooling inflation and clarity around the Fed’s response to the economic fallout from the Middle East conflict.