New month, new direction for mortgage rates? Increases in borrowing costs showered down for four weeks in a row during April, but May has arrived with a drop in rates.
Better still, a new forecast says 2019 will be a year of lower mortgage rates. Looking to buy or refi? You just got some great news!
This week's numbers
The average rate on 30-year fixed-rate mortgages has dropped to 4.14%, from last week's 4.20%, reports mortgage giant Freddie Mac.
That's down quite a bit from a year ago at this time, when the benchmark mortgage rate was averaging 4.55%. The loans in Freddie Mac's survey come with an average 0.5 point.
Meanwhile, as rates were still going up last week, mortgage applications fell 4.3%, the Mortgage Bankers Association says.
Applications for loans to buy homes dipped 4%, and refinance applications went down 5%.
Check out today's best mortgage rates where you live.
Why rates are doing what they're doing
Rates are looking waaaaaay better than they were last fall, when 30-year mortgages nearly hit 5%. They're in retreat this week because inflation and other economic numbers are looking, well, "meh," says Sam Khater, Freddie Mac’s chief economist.
The Federal Reserve is seeing the same things and this week opted to make no changes in interest rates, which should help to hold down mortgage rates.
In fact, Freddie Mac just lowered its rates forecast for 2019 — to an average 4.3% for a 30-year loan, down from last year's average of 4.6%.
"Moving into summer, we expect rates to be about a quarter to half a percentage point lower than where they were last year, which is good news for the housing market," Khater says.
He's anticipating a strong spring and summer for home sales, particularly since Americans' wages are keeping up with rising home prices for the first time in seven years.
Are you in the market to buy a house? Calculate what your monthly mortgage payment would be.
This week's other mortgage rates
Rates on 15-year mortgages have gone up to an average 3.60%, from last week's 3.64%, Freddie Mac says. One year ago, rates on those shorter-term home loans were averaging 4.03%.
Meanwhile, 5/1 adjustable-rate mortgages — with rates that hold steady for five years and then can "adjust" up (or down) each year — have slid this week. They're being offered at initial rates averaging 3.68%, compared to 3.77% last week.
At this time last year, those ARMs were being offered at an average initial rate of 3.69%.
To be ready to apply for a mortgage, you'll need down payment money. Find a savings account at a great rate to help you pull that cash together.