Average rate on 30-year mortgage tick down to 2.88%

U.S. average rates on long-term mortgages edged down slightly this week, remaining at historically low levels

Mortgage Rates (Copyright 2020 The Associated Press. All rights reserved)

U.S. average rates on long-term mortgages edged down slightly this week, remaining at historically low levels.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan fell to 2.88% from 2.90% last week. One year ago, the rate averaged 3.65%.

The average rate on the 15-year fixed-rate mortgage also fell, to 2.36% from 2.40% last week.

Low interest rates have made already strong demand for housing even more robust, but a lack of available supply has flummoxed would-be buyers

Last week, the National Association of Realtors reported that the number of existing homes for sale in August was 1.49 million units, a decline of 18.6% from the same time last year. The dearth of inventory has also pushed prices higher, with the median price for both existing and new single-family homes pushing past $310,000.

Economists were concerned about the lack of available homes for sale even before the coronavirus outbreak made many homeowners think twice about upgrading.

To make matters worse, the number of people seeking U.S. unemployment aid rose remains historically high. The government reported Thursday that 837,000 Americans applied for jobless benefits, indicating companies are still cutting jobs despite the tentative recovery that began after states started reopening.