Mortgage rates in the U.S. plunged to the lowest level in more than five months.
The average for a 30-year loan was 2.78% down from 2.88% last week, Freddie Mac said in a statement Thursday. It was the fourth straight weekly decline, pushing rates down to the lowest since Feb. 11.
“Concerns about the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth,” said Sam Khater, Freddie Mac’s chief economist. “While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit.”
Mortgage rates have been below 3.1% since mid-April after hitting a record low of 2.65% in January. Cheap borrowing costs have have given Americans more purchasing power, but the shortage of available homes has pushed up prices, making it difficult for buyers to find affordable properties.
Inventory is beginning to improve, making the latest drop in rates welcome news for people in the market for homes, according to George Ratiu, senior economist at Realtor.com.
”Many sellers are going to take advantage of higher prices,” he said. “This summer is going to signal the move to the next chapter, and this will very much be the year they’re going to put their home on the market.”
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