U.S. Mortgage Rates Fall for the First Time in a Month

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Mortgage rates in the U.S. fell for the first time in a month, cutting costs for buyers during the housing market’s busiest time of the year.

The average rate for a 30-year fixed mortgage slipped to 3.84 percent from 3.85 percent last week, Freddie Mac said in a statement Thursday. The average 15-year rate declined to 3.05 percent from 3.07 percent, according to the McLean, Virginia-based mortgage-finance company.

Mortgage rates have fluctuated within a range of about a quarter percentage point this year as investors try to guess the Federal Reserve’s timetable for ending the near-zero rates it has given banks to encourage them to lend. The shift probably won’t happen by the end of June, according to minutes of the Federal Open Market Committee’s April meeting, released Wednesday. While the overnight lending rate doesn’t directly impact home-loan rates, it influences mortgage investors who worry about inflation.

“We know the general direction of mortgage rates will be higher this year as the economy gets stronger,” said Mark Zandi, chief economist of Moody’s Analytics Inc. “With the economy at full employment, the housing market will be able to gracefully digest it.”

The average rate for a 30-year fixed mortgage probably will reach 4.3 percent by the fourth quarter, according to the Mortgage Bankers Association. It probably won’t break 5 percent until mid-2016, the trade group said in a forecast this week. Home lending probably will total $1.3 trillion this year, up 14 percent from 2014, as economic improvements spur gains in home sales and prices, according to the association.

Demand for purchases remains spotty. Sales of previously owned homes dropped 3.3 percent last month to a 5.04 million annualized rate, down from a 5.21 million pace in March that was the strongest in almost two years, the National Association of Realtors reported Thursday.

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