Mortgage rates dip to 6.26% as refi activity rises

U.S. mortgage rates fell again this week, dipping to an average 6.26 percent on the benchmark 30 year fixed loan and prompting a surge in refinance activity, industry data released Thursday showed. Freddie Mac said the 30 year rate eased from 6.35 percent the prior week, while the 15 year fixed rate fell to 5.41 percent. The pullback comes amid softer long term Treasury yields and market expectations after the Federal Reserve delivered a quarter point cut in its benchmark rate Wednesday, analysts and reports said.

Freddie Mac’s chief economist, Sam Khater, said the decline in rates encouraged many homeowners to refinance; Freddie Mac reported that refinances accounted for nearly 60 percent of mortgage applications, the highest share since January 2022. The Mortgage Bankers Association reported mortgage applications jumped nearly 30 percent from the previous week and that adjustable rate mortgages made up about 13 percent of applications, the largest share since 2008.

Mortgage rates generally track the 10 year Treasury yield, and economists said movements in that benchmark will largely determine whether the recent easing continues. Bank of America’s mortgage backed securities...