Long-term U.S. rates on mortgages fell in the week for a second straight week amid continued global economic concerns. Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage dipped to 3.54 percent from 3.60 percent a week ago. That is well below its level a year ago of 4.00 percent. The average rate on 15-year fixed-rate mortgages declined to 2.81 percent from 2.87 percent.
Average 30-year mortgage falls to 3.54%
Deepening doubt with regards to the strength of the U.S. economy and concern that Britons could vote to leave the European Union in a referendum in the near future are stoking the malaise.
Worries over a possible British exit from the 28-nation bloc helped depress the U.S. stock market for five straight days. Advocates of Britain staying in the EU say a vote to leave could bring economic calamity to the country. It in all probability would roil global markets.
Bond prices have remained high, keeping yields low. Bond investors say the uncertainty about the expected close British vote has forced European investors to buy up U.S. government bonds in a search for security, pushing bond yields to their lowest levels in years.
Rates on mortgages often move in sync with long-term bond yields. The yield on the benchmark 10-year Treasury note dropped to 1.57 percent Wednesday from 1.70 percent a week earlier. It fell further to 1.52 percent Thursday morning.
Not surprisingly, the Federal Reserve’s policymakers decided at their meeting this week to maintain interest rates unchanged at 0.25 % to 0.50 %. In their announcement Wednesday, the Fed officials stated that while U.S. economic activity continues to strengthen, “the pace of improvement in the labor market has slowed,” a mention of the employment reports for April and May that had been weaker than expected.
To calculate average mortgage rates, Freddie Mac surveys lenders throughout the country at the start of each week. The average doesn’t include extra fees, referred to as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from a week ago at 0.5 point. The fee for a 15-year loan also was steady at 0.5 point. Rates on adjustable five-year mortgages averaged 2.74 percent this week, down from 2.82 % last week. The fee remained at 0.5 percent.
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