Mortgage rates dip to 7.24% as inflation pressures persist

The average interest rate on a 30-year fixed mortgage fell to 7.24% this week, marking the second consecutive weekly decline, according to Freddie Mac data released Thursday. The rate remains more than a percentage point higher than levels seen before the Iran war began in late February.

Elevated borrowing costs have made homes less affordable for many buyers, while the 'lock-in' effect keeps existing homeowners with lower rates from selling. Consumer prices rose at an annual rate of 3.7% in September, significantly above the Federal Reserve's 2% target.

Financial markets anticipate the Federal Reserve will raise benchmark interest rates again at its December meeting, a move that could add further upward pressure on mortgage rates. Fed Chair Kevin Warsh noted on Wednesday that credit conditions have tightened for some businesses and households following the central bank's September rate hike.

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