Mortgage rates continue to retreat. The average rate on 30-year mortgages fell to 6.3 percent this week from 6.42 percent the previous week, according to Bankrate’s national survey of large lenders.

“Mortgage rates declined for the fourth straight week and have now fallen almost 40 basis points over the past month,” says Joel Kan, deputy chief economist at the Mortgage Bankers Association.

After a steep rise for most of 2022, mortgage rates topped 7 percent in November. Though they’ve retreated from their autumn peak, rates remain well above their 2021 lows, and the run-up has roiled the housing market.

The Fed has been moving aggressively to control inflation. The central bank followed seven rate hikes in 2022 with a Feb. 1 increase, albeit a lesser one of a quarter-point this time. Those moves have created upward pressure on rates — while also raising the risk of a recession. While its moves are influential, the Fed doesn’t directly set fixed mortgage rates, however. The most relevant benchmark is the 10-year Treasury yield, which also has bounced around in recent weeks.

The 30-year fixed mortgages in this week’s survey had an average total of 0.52 discount and origination points.

Over the past 52 weeks, the benchmark 30-year fixed-rate mortgage has averaged 5.8 percent. A year ago, the 30-year fixed-rate mortgage was 3.76 percent. Four weeks ago, the rate was 6.71 percent. The 30-year fixed-rate average for this week is 2.45 percentage points higher than the 52-week low of 3.85 percent.

As for other loans:

Where mortgage rates are headed

Mortgage experts see rates decreasing over the coming year as the Fed’s round of rate cuts seemingly draws to an end. Mark Fleming, chief economist at title insurer First American, expects rates to keep falling.

“Depending on what the 10-year Treasury does in the coming days, we might even go below 6,” Fleming says. ‘There is a good chance that mortgage rates will continue to decline.”

Mortgage rates typically move in lockstep with the 10-year Treasury. The average rate on a 30-year loan usually is 1.5 to 2 percentage points above the 10-year rate. But in the turbulent times of 2022, that gap — known as the “spread” — widened to more than 2.5 percentage points.

“Treasury yields were higher on average last week, while mortgage rates decreased, which was a sign of a narrowing spread between the two,” Kan says. “The spread between mortgage rates and the 10-year Treasury has been abnormally wide since early 2022. Further narrowing of that spread is expected to put downward pressure on mortgage rates in the coming months.”

Some borrowers already are finding deals below 6 percent. “Mortgage rates have fallen from over 7 percent in early November to the low 6 percent range, and for many well-qualified borrowers, to back in the high 5 percent range,” says James Sahnger of C2 Financial Corp. in Jupiter, Florida.

The national median family income for 2022 was $90,000, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in December was $366,900, according to the National Association of Realtors. Based on a 20 percent down payment and a mortgage rate of 6.3 percent, the monthly payment of $1,816 amounts to 24 percent of the typical family’s monthly income. A year ago, median family income was $79,900, the median home price was $364,600 and the average mortgage rate was 3.4 percent. Buying the typical home then required just 19 percent of a family’s monthly income.

Methodology

The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types — thrifts, credit unions, commercial banks and mortgage lending companies — is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.