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Mortgage rates drop below 7% for first time since March

Mortgage rates fell below 7% last week for the first time since March, encouraging more homebuyers to apply for loans.

The 30-year fixed mortgage rate fell to 6.94% from 7.02% in the week ending June 14, according to data released Wednesday by the Mortgage Bankers Association.

The five-year adjustable-rate mortgage fell to 6.27% from 6.45%, the lowest level since February. Bloomberg News reported and Market Watch..

Mortgage rates fell below 7% last week for the first time since March. Getty Images

Mortgage applications for home purchases also increased in the seven days ending Friday.

The market index rose 0.9% from the previous week to 210.4 for the week ending June 14. The index rose 0.9% from the previous week to 210.4 a year ago. The index was 209.8 a year ago.

“Purchase applications increased slightly this week, led by applications for conventional loans,” Mike Fratantoni, MBA chief economist, said in a statement.

While “purchase volumes are still more than 10 percent below last year’s pace,” it added, “MBA expects home sales to recover over the remainder of the year as more inventory comes onto the market.”

The decline in mortgage rates is seen as a sign that the Federal Reserve is more likely to cut interest rates this year.

Investors are expecting at least one rate cut.

Fed officials said last week that while inflation is close to its 2 percent target, they may only cut interest rates once this year, and that would be as late as December.

The housing market is struggling, a situation made worse by rising interest rates and rising inflation. Reuters

Policy makers now expect one rate cut, down from three previously expected.

Inflation remains high, forcing the Fed to keep interest rates at 5.25% to 5.50%, the highest in 23 years.

The benchmark rate has remained at that level since last July, after the Federal Reserve raised rates 11 times to rein in borrowing and tame inflation.

High mortgage rates and rising prices continued to have a negative impact on the spring homebuying season.

According to the National Association of Realtors, existing home sales in April fell 1.9 percent to a seasonally adjusted annualized rate of 4.14 million from the revised March rate of 4.22 million.

Expected interest rate cuts by the Federal Reserve could further spur home buying. Reuters

Sales were down nationwide, with declines of 4 percent in the Northeast, 2.6 percent in the West, 1.6 percent in the South and 1 percent in the Midwest.

The median price of an existing home rose 5.7 percent to $407,600, the 10th consecutive increase and the highest April price on record.

Lawrence Yun, the association’s chief economist, called the decline in sales “a little frustrating.” Economists had expected sales to reach 4.2 million units.

The figures for May have not yet been reported.

With post wire