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Long-term U.S. mortgage rates fell this week with the benchmark 30-year home loan hitting its lowest level ever.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the key 30-year fixed-rate mortgage fell to 3.07%, down from last week’s 3.13%. For the second week in a row, it is the lowest level since Freddie began tracking average rates in 1971. A year ago, the rate stood at 3.75%.
The average rate on the 15-year fixed-rate mortgage also fell slightly to 2.56% from 2.59% last week, but it is down from 3.18% a year ago.
The historically low interest rates come as the U.S. housing market appears to be rebounding somewhat from a coronavirus-caused spring freeze. Sales of new homes rose a surprisingly strong 16.6% in May as major parts of the country reopened, though sales of existing homes struggled through the month with a 9.7% decline.
A report on pending home sales last week offered some optimism, with the number of Americans signing contracts to purchase homes jumping 44.3% in May after a record-breaking April decline. Those contract signings are a barometer of finalized purchases over the next two months.
The impact of the coronavirus pandemic sidelined both buyers and sellers in March and April, so there remains a tight supply of homes available for sale, running up against high demand.