A popular measure of mortgage rates showed the average 30-year fixed rate dipping below 3% Thursday for the first time in almost two months.
The average for the week through Thursday was 2.97%, down from 3.04% last week and the lowest since Feb. 25, data from Freddie Mac showed.
The Mortgage Bankers Association (MBA) also reports weekly data, saying Wednesday that the average 30-year rate last week dipped to 3.20% from 3.27%. While Freddie Mac’s rates closely track the MBA’s, Freddie Mac’s reflect loans made rather than applied for as well as a more recent time period, among other slight differences.
The recent drop is good news for homeowners who feared they had missed out on refinancing or buying opportunities. Rates recently had ticked up on the prospects for a booming economic recovery and higher inflation after hitting record lows last year and this winter. The Federal Reserve’s efforts to keep the economy from collapsing, including cutting the benchmark interest rate to close to zero, helped to fuel a pandemic boom in home sales, but these have tapered off because of the recent uptick in mortgage rates and a massive shortage of homes for sale. Sales dropped 3.7% in March, the National Association of Realtors said Thursday.
Homeowners shouldn’t get too used to the downward trend in mortgage rates, MBA’s chief economist Mike Fratantoni said Thursday.
“The economy will continue to recover, with rapid job growth, particularly in the hardest-hit, service sectors of the economy," Fratantoni said in a statement for the group’s spring conference and expo. "The job growth is certainly positive, but this environment sets the stage for higher mortgage rates and faster inflation."