U.S. Mortgage Rates Drop to 3.13% in First Slide Since January

(Bloomberg) -- U.S. mortgage rates dropped for the first time since January, snapping a streak of seven straight weekly gains.

The average for a 30-year loan was 3.13%, down from 3.18% last week, Freddie Mac data showed Thursday.

Mortgage rates are tracking yields for the benchmark 10-year Treasuries, which have slipped this week after reaching levels not seen since before the pandemic.

Mortgage rates plunged in 2020 and hit a record low of 2.65% in January. Since then, borrowing costs have ticked up as vaccines fuel optimism about an economic recovery and investors bet that inflation will accelerate.

While still low by historical standards, the higher rates in recent weeks have slowed a refinancing boom that drove record profits for the mortgage industry last year.

The U.S. housing market, meanwhile, has been booming in the pandemic. But a shortage of available homes to buy has prompted bidding wars and driven up prices. The lack of inventory may slow sales as Americans struggle to find properties they can afford.

“Without a significant boost to inventory, we can expect sales activity to come in below expectations during the critical spring season,” said George Ratiu, senior economist at Realtor.com.

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