Interest rates on conventional purchase-money mortgages decreased in May from the previous month, according to the Federal Housing Finance Agency.
The FHFA gathers this information from several indices of new mortgage contracts.
The average interest rate on all mortgage loans in May was 3.7%, down five basis points from April’s 3.75%.
Similarly, the national average contract mortgage rate for the purchase of pre-owned homes according to the Combined Lenders Index was also 3.7% for loans closed in late May, a decrease from April’s 3.75%.
The average interest rate on conventional 30-year fixed-rate mortgages of $417,000 or less was 3.89%, a decrease of five basis points from April’s 3.94%.
The effective interest rate on all mortgages, which accounts for the addition of initial fees and charges over the life of the loan, was 3.83% in May, a decrease of six basis points from April’s 3.89%.
Some experts predict that rates may decrease even further in the coming months due to the U.K.’s decision to leave the European Union.
The average loan amount increased to $329,500 in May, up $7,100 from April’s $322,400.
This chart shows the average contract mortgage rate of pre-owned homes since last May:
Click to Enlarge