Mortgage rates in the U.S. have been slipping over the last several weeks, after a rapid rise in late April and May. Rates had shot up from the record lows registered in April, due to investors’ increased optimism around the economic recovery and a sell-off in the bond market. However, the recent drop has investors and borrowers breathing a sigh of relief.
The average rate for a 30-year fixed rate loan has decreased from 3.02 percent at the beginning of June to 2.98 percent as of June 29, according to Freddie Mac. Rates on 15-year fixed-rate loans have dropped from 2.51 percent to 2.46 percent during the same period.
Analysts expect mortgage rates to remain stable or drop even further in the coming months. The Federal Reserve recently reaffirmed its commitment to keeping interest rates near zero until at least 2023, in an effort to support the economic recovery. This is likely to continue to put downward pressure on mortgage rates.
At the same time, the supply of homes for sale remains low in many parts of the country, driving up home prices. This could be another factor holding rates at their current levels.
Overall, the recent drop in mortgage rates could be a good opportunity for potential buyers to lock in a low rate, while potentially saving on interest payments over the course of their loan.