US mortgage rates are down again, but for how long?

US mortgage rates have declined for the second week in a row, according to Freddie Mac’s Primary Mortgage Market Survey. The 30-year fixed-rate loan dipped two basis points to 2.94% week over week.

“Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month,” said Freddie Mac Chief Economist Sam Khater. “Low rates offer homeowners an opportunity to lower their monthly payment by refinancing, and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option.”

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While the low mortgage rate environment is good news for homeowners and borrowers, that doesn’t mean it’s sustainable due to the surging inflation rate in the economy. In April, consumer prices reached their highest level in 13 years, according to the US Labor Department.

“The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer,” Khater said.

The 15-year fixed-rate mortgage also declined from last week’s average of 2.30% to 2.26%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage saw an 11-basis-point drop, down to 2.59%.