Mortgage rates continued to drop after falling to a six-month low last week, Freddie Mac’s Primary Mortgage Market Survey found.

The 30-year, fixed-rate mortgage averaged 4.14% for the week ended May 22, a drop from 4.20% last week, but up from 3.59% a year ago.

In addition, the 15-year, FRM came in at 3.25%, down from last week’s 3.29%, and up from 2.77% in 2013.

The 5-year Treasury-index hybrid adjustable-rate mortgage was 2.96%, falling from 3.01% a week prior, but an increase from 2.63% a year prior.

The 1-year Treasury-indexed ARM averaged 2.43% this week, unchanged from last week, but down from 2.55% a year ago.

“Mortgage rates continued to decline this week as industrial production slipped by 0.6% in April, below the market consensus forecast,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

“Meanwhile, housing starts jumped 13% in April to a seasonally adjusted annual rate of 1,072,000 units, well above expectations. Permits rose to a seasonally adjusted annual rate of 1,080,000 in April, also above expectations,” Nothaft added.

Bankrate also reported a drop, with the 30-yr, FRM decreasing to 4.29% from 4.33% a week ago.

The 15-year, FRM fell to 3.38% from 3.42%, while the 5/1 ARM declined to 3.21% from 3.31%.

“Mortgage rates have been on the downswing as the possibility of a low interest rate environment persisting longer than expected is drawing increased consideration from investors,” Bankrate said.

“The Federal Reserve remains concerned about inflation being too low, readings on the housing market have been disappointing of late – both of which lead to uncertain conclusions about the U.S. economy – and the European Central Bank is widely expected to begin their own round of bond purchases in the coming months. Each of these argues for interest rates, including mortgage rates, remaining lower than expected, longer than what had been expected just a few months ago,” it continued. 

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