Mortgage rates drop in U.S. housing market

WASHINGTON, May 3 (Xinhua) -- Mortgage rates dropped in the United States after several weeks of rising, the U.S. Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, said on Thursday.

For the week ending May 2, the 30-year fixed-rate mortgage (FRM) in the United States dropped to 4.14 percent from the previous week's 4.2 percent.

For the same period one year ago, the 30-year FRM averaged 4.55 percent.

Besides, the 15-year FRM this week dropped to 3.6 percent, lower than the previous week's reading of 3.64 percent. The figure was 4.03 percent for the same period a year ago.

"Slightly weaker inflation and labor economic data caused mortgage rates to dip this week," said Sam Khater, chief economist at Freddie Mac.

"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," said Khater.

The Mortgage Bankers Association reported on Wednesday that mortgage applications in the United States dropped last week, even as mortgage rates were lower than the same period one year ago.

"These lower rates combined with solid economic growth, low inflation and rebounding consumer confidence should provide a solid foundation for home sales to continue to improve over the next couple of months," said Khater.

Freddie Mac is a corporation founded by the U.S. Congress, aiming at promoting stability and affordability in the U.S. housing market by purchasing mortgages from banks and other loan makers.

The corporation has been conducting weekly surveys on U.S. mortgage rates since April 1971.