Mortgage rates drop to lowest level of 2017

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Mortgage rates hit their lowest mark of the year, as they were affected by the stock market sell-off on May 17, according to Freddie Mac.

The 30-year fixed-rate mortgage averaged 3.95% for the week ending May 25, down from last week when it averaged 4.02%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.64%.

The Dow Jones Industrial Average fell nearly 275 points on May 17. As investors purchased bonds instead, the yield on the 10-year Treasury fell 11 basis points. During the following week, the yield has only recovered by three basis points.

"As we predicted, the 30-year mortgage rate fell 7 basis points this week in a delayed reaction to last week's sharp drop in Treasury yields. The survey rate stands at a new low for the year," said Sean Becketti, chief economist at Freddie Mac.

The 15-year fixed-rate mortgage averaged 3.19%, down from last week when it averaged 3.27%. At year ago at this time, the 15-year averaged 2.89%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.07%, down from last week when it averaged 3.13%. At this time last year, it averaged 2.87%.

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