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WASHINGTON >> Mortgage rates dropped to a one-year low this week, but scope for further declines is limited as Treasury yields have risen after Federal Reserve Chair Jerome Powell tempered expectations for another interest rate cut in December. The average rate on the popular 30-year fixed-rate mortgage slipped to 6.17%, the lowest since October 2024, from 6.19% last week, mortgage finance agency Freddie Mac said today. It averaged 6.72% in the year-ago period and has dropped from 7.04% in January as the U.S. central bank resumed monetary policy easing. The Fed on Wednesday cut its benchmark overnight interest rate by another 25 basis points to the 3.75%-4.00% range. But Powell cautioned that “a further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.” A nearly month-long government shutdown has deprived policymakers, businesses and investors of official data, making it difficult to get a clear picture of the economy’s health. The benchmark U.S. 10-year Treasury note yield on Wednesday notched its biggest daily rise since June 6. It was up about 2.3 basis points at 4.095% today. Mortgage rates track the 10-year Treasury yield. The recent decline in mortgage rates has not done much to stimulate the housing market, against the backdrop of a softening labor market, growing economic uncertainty and still-rising house prices. Lower mortgage rates have, however, boosted refinancing of existing home loans. A report from the National Association of Realtors on Wednesday showed contracts to buy previously owned homes dropped 0.9% in September from a year earlier.
