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30-year mortgage rates fall to 3-month low at 2.94%

U.S. mortgage rates fell for a second straight week to a near three-month low amid fears of economic weakness.

The average for a 30-year loan was 2.94%, down from 2.96% last week and the lowest since Feb. 18, Freddie Mac data showed Thursday.

The 30-year average, which hit a record low of 2.65% in early January, had climbed above 3% this year amid optimism about an economic rebound from the pandemic. Now, a gloomier outlook pushed rates below that benchmark for the past four weeks. A year ago, rates were 3.28%.

Cheap loans have fueled the past year’s rally in home purchases and given Americans more buying power even as bidding wars push up prices. The latest decline also provides current borrowers with another window to lower their monthly payments by refinancing.

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April’s disappointing jobs report is a sign that while the U.S. economy continues its post-pandemic recovery, the road ahead will be bumpy. The U.S. remains about 8.2 million jobs short of the where the country stood before the coronavirus began to spread last year. The shortfall raises concerns about how quickly the U.S. economy can return to normal.

“Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month,” said Sam Khater, Freddie Mac’s chief economist. The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer.”

The 15-year fixed-rate mortgage averaged 2.26%, down from last week’s 2.3% and 2.72% a year ago.

Source: Orange County Register

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