(Bloomberg) -- Mortgage rates in the U.S. dropped to the lowest level in four months.

The average for a 30-year loan was 2.93%, down from 2.96% last week and lowest since Feb. 18, Freddie Mac said Thursday.

“Mortgage rates continue to drift down as markets concur with the view that inflation increases are temporary,” said Sam Khater, chief economist at Freddie Mac said in a statement.

Cheaper borrowing costs have fueled the pandemic housing rally for the past year, giving Americans searching for properties more buying power. After hitting a record low at 2.65% in January, rates have been hovering near 3% for about two months.

Even with borrowing costs at historic lows, potential buyers are struggling to find homes they can afford as an inventory shortage and frenzied demand drive up prices.

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