US average mortgage rates decline; 30-year loan at 2.95%

Business

A “lot for sale” sign stands along side a housing lot in Des Plaines, Ill., Sunday, March 21, 2021. Mortgage rates declined this week, pushing the benchmark 30-year home loan back down below the 3% mark. Signs continued of the economy’s recovery from the pandemic recession. Mortgage buyer Freddie Mac reports, Thursday, May 27, that the average for the 30-year rate fell to 2.95% from 3% last week. (AP Photo/Nam Y. Huh)

WASHINGTON (AP) — Mortgage rates declined this week, pushing the benchmark 30-year home loan back down below the 3% mark. Signs continued of the economy’s recovery from the pandemic recession.

Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year rate fell to 2.95% from 3% last week. At this time last year, the average long-term rate was 3.15%.

The rate for a 15-year loan, popular among those seeking to refinance, eased to 2.27% from 2.29% last week.

With historically low mortgage rates prevailing, the U.S. housing market has grown so overheated as demand outpaces supply that prices keep hitting record highs — and roughly half of all houses are now selling above their list price. Two years ago, before the pandemic struck, just a quarter of homes were selling above the sellers’ asking price, according to data from the real estate brokerage Redfin.

New data out this week further illuminated the red-hot nature of the housing market: Prices rose in March at the fastest pace in more than seven years. The S&P CoreLogic Case-Shiller 20-city home price index jumped 13.3% that month compared with a year earlier — the biggest such gain since December 2013. That price surge followed a 12% year-over-year jump in February.

The pandemic has encouraged more people to seek out the additional space provided by a single-family home. Yet at the same time, COVID-19 discouraged many homeowners from selling and opening up their homes to would-be buyers, thereby shrinking the number of homes for sale.

In the latest positive economic news, the government reported Thursday that the number of Americans seeking unemployment benefits dropped last week to 406,000, a new pandemic low and further evidence that the job market is strengthening as the coronavirus wanes and the economy reopens more widely.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.