A ceasefire between the U.S. and Iran lowers 30-year mortgage rates to 6.37%

Prospective homebuyers face a reduction in monthly borrowing costs after the average 30-year fixed rate mortgage rate dropped to 6.37% from 6.46% last week. The decline follows five straight increases that added hundreds of dollars a month in costs for home shoppers. The rate drop was driven by a decrease in the 10-year U.S. Treasury yield, which banks use as a guide to pricing home loans. The yield dropped to 4.28% in midday trading Thursday, down from 4.3% a week ago. This shift in bond yields followed a two-week ceasefire agreement between the U.S. and Iran. Mortgage applications fell 0.8% last week from the previous week.