U.S. mortgage rates dip back below 3% as borrowing costs seesaw

Mortgage rates in the U.S. are back below 3%.

The average for a 30-year loan was 2.95%, down from 3% last week, Freddie Mac data showed Thursday.

Rates have seesawed in recent weeks, with investors looking for signs of inflation as the economy recovers from the pandemic. Historically low borrowing costs have fueled a housing rally over the past year, with a shortage of homes to buy amid intense demand for properties in the suburbs riving up prices.

Even with the increased buying power that comes with lower rates, many Americans are struggling to find properties they can afford. Sales of new homes declined in April by more than forecast, as the higher prices constrained demand.

Mortgage rates plummeted as the coronavirus roiled financial markets. The bottom came early this year at 2.65%. Rates then started ticking up, hitting a high of 3.18% on April 1.