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Mortgage Rates Drop Further

Mortgage rates, or interest rates on home loans, further dropped this week and continues to be under 3% mark for fourth week in a row, according to mortgage provider Freddie Mac (FMCC.OB).

Releasing the results of its primary mortgage market survey, Freddie Mac said that the 30-year fixed-rate mortgage or FRM averaged 2.94 percent for the week ending May 13, 2020, down from 2.96 percent last week. A year ago at this time, the average rate was 3.28 percent.

The 15-year FRM this week averaged 2.26 percent, down from 2.30 percent last week. A year ago at this time, the 15-year FRM averaged 2.72 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage or ARM averaged 2.59 percent, down from 2.70 percent last week. It was 3.18 percent a year ago.

"Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under three percent for the past month," said Sam Khater, Freddie Mac's Chief Economist. "Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren't pursuing the option."

Khater continued, "Additionally, 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."

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