U.S. Markets

Mortgage rates fall below 3% for first time since February - MBA

FILE PHOTO: A man crosses a nearly deserted Nassau Street in front of the New York Stock Exchange (NYSE) in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 3, 2020. REUTERS/Mike Segar

(Reuters) - The 30-year U.S. mortgage rate fell below 3% last week for the first time since February as interest rates globally drifted lower.

The Mortgage Bankers Association (MBA) said on Wednesday its average contract interest rate for traditional 30-year mortgages decreased to 2.97% from 3.01% in the week ending July 30.

After hitting record lows late last year below 2.9%, mortgage rates climbed in the first part of this year and peaked in the spring. Rates have been drifting lower since, held down in large part by the U.S. Federal Reserve’s extraordinary stimulus measures aimed at helping the economy rebound from the coronavirus pandemic.

The seasonally adjusted market index fell 1.7% from a week earlier, the MBA said. That reflected a 1.7% decrease in applications to refinance existing loans, while purchase applications also declined 1.7%.

“Purchase application volume decreased again, reflecting the ongoing lack of inventory that continues to drive rapid home-price appreciation across the country,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement.

Reporting by Evan Sully; Editing by Sam Holmes