US mortgage rates decrease for second straight week

Drop comes after Fed suggests a pause in interest rate hikes

US mortgage rates decrease for second straight week

US mortgage rates dipped for the second consecutive week after the Federal Reserve signaled a potential pause in rate hikes.

The average 30-year fixed mortgage rate dropped four basis points to 6.35% as of May 11, according to Freddie Mac's latest survey. A year ago, the 30-year mortgage rate was 5.30%.

The 15-year fixed-rate mortgage edged down one basis point week over week to 5.75% and was higher than last year's 4.48% average.

"This week's decrease continues a recent sideways trend in mortgage rates, which is a welcome departure from the record increases of last year," said Freddie Mac chief economist Sam Khater. "While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023. This should bode well for the trajectory of mortgage rates over the long-term."

Demand for home loans surged following the Fed's latest meeting this month. Mortgage applications jumped 6.3% on a seasonally adjusted basis, the Mortgage Bankers Association reported last week. Purchase applications climbed 5%, and refinance activity grew 10% week over week.

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