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Down, Down, Down: Mortgage Rates Dip for a 3rd Week

Doug Whiteman
Down, Down, Down: Mortgage Rates Dip for a 3rd Week

Mortgage rates have kept their May streak going and are down for the third week in a row. They're back in the neighborhood of the lowest levels of 2019 -- which is a very welcoming place if you're shopping for a home this spring.

Consider whether you want to lock in a low rate, so it won't get away.

This week's numbers

The average rate on 30-year fixed-rate mortgages has gone down to 4.07%, from last week's 4.10%, reports mortgage giant Freddie Mac. The loans in the survey come with an average 0.5 point.

Mortgages are pretty cheap compared to last year at this time, when the benchmark rate was averaging 4.61%.

But borrowers may be missing out. Mortgage applications slipped 0.6% last week, the Mortgage Bankers Association says.

Take a look at today's best mortgage rates where you live.

Why rates are doing what they're doing

RebeccaPavlik / Shutterstock
The homebuying season is likely to be a big one.

Interest rates have moved down this week in response to a few so-so economic numbers, and to the U.S. trade spat with China, says Sam Khater, the chief economist at Freddie Mac.

"While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates, which will drive up home sales this summer," Khater says.

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A new forecast from Freddie Mac predicts this will be a bigger year for home sales than 2018 — so if you've been thinking about putting your house on the market, this might be your year.

Homebuyers will be encouraged by rising paychecks — and lower interest rates. Thirty-year mortgage rates will average 4.3% in 2019, Freddie Mac says, down from last year's average of 4.6%.

If buying a home might be in your future, calculate what your monthly mortgage payment would be.

This week's other mortgage rates

Rates on 15-year mortgages have fallen to an average 3.53% this week, from 3.57% last week, Freddie Mac says. One year ago, rates on those shorter-term home loans were averaging 4.08%.

Meanwhile, 5/1 adjustable-rate mortgages — with rates that hold steady for five years and then can "adjust" up (or down) each year — have edged higher. They're being offered at initial rates averaging 3.66%, versus 3.63% last week.

A year ago, those ARMs were being offered at an average initial rate of 3.82%.

When you're ready to apply for a mortgage, you'll need to have some down payment money together. Find a savings account at a great rate to help you put that cash aside.