Tuesday, 11 Dec 2018

Mortgage rates are down significantly over the past three weeks

The 30-year fixed-rate dropped to a two-month low of 4.75 percent but still remains well over a year ago. (iStock / Dwuan June) (istockphoto / istockphoto)

Mortgage rates continue to be driven by stock market volatility driven investors to seek safety in long-term bonds.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slid to a two-month low of 4.75 percent with an average 0.5 point. (Points are paid to a lender equal to 1 percent of the loan amount.) It was 4.81 percent a week ago and 3.94 percent a year ago. 19 basis points since Nov. 15. (A basis point is 0.01 percentage point.)

The 15-year average rate was 4.21 percent with an average 0.4 point. It was 4.25 percent a week ago and 3.36 percent a year ago. The five-year rate dropped to 4.07 percent with an average of 0.3 points. It was 4.12 percent last week and 3.36 percent a year ago.

"Said forwarder, as markets interpret," said Danielle Hale, chief economist at Realtor.com. "Looking forward, as markets interprets sparked stock market fluctuations and caused investors to flock to the certainty of Treasuries," said Danielle Hale, chief economist at Realtor.com. [Federal Reserve] Chairman [Jerome] Powell's speech last week as an indicator of future rates.

However, Hale also pointed out that Friday's employment report could affect mortgage rates.

"While a low reading on job or wage gains is ordinarily involved as bad news for the economy, at this stage in the cycle, a lower reading would suggest that the Fed is relatively closer to neutral expected, "Hale said. "Fed up continues gradual rate hikes."

The yield on the 10-year Treasury dropped below 3 percent this week, falling to 2.91 percent Tuesday. (Financial markets were closed Wednesday for President George W. Bush's funeral.) The 10-year yield has dropped 33 basis points in a month, as the stock market sell-off has driven investors to put their money in bonds.

Mortgage rates tend to follow the same path as long-term bond yields. A strong economy is usually bad because it raises concerns about inflation. Investors in fixed-income investments as they are worried about inflation because it causes their assets to lose value.

"Investors quickly retreated to safe-haven assets in a move reminiscent of previous global scares over the past three years have continued holding long-term lending rates," said Aaron Terrazas, senior economist at Zillow . "Strong job and wage growth on the face of the downward movement in the past week."

Bankrate.com, which puts out a weekly rate of interest rate, which is more than two-thirds of the experts it will survey the future. Michael Becker, branch manager at Sierra Pacific Mortgage, is one who says rates will hold steady.

"Becker said." "Looking forward, it's hard to see more quickly," said Becker said. they have dropped. "

Meanwhile, mortgage applications are on the rise, according to the latest data from the Mortgage Bankers Association. The market composite index – a measure of total loan volume application – pink 2 percent from a week earlier. A week ago, it was purchase applications that drove the increase. This time, it was refinance applications. The refinance index jumped 6 percent from the previous week, while the purchase index edged up 1 percent.

The 40.4 percent of all applications.

"Joel Kan, an MBA economist, said in a statement," were 10 percent and 7 percent higher, respectively, than the week before the Thanksgiving holiday. "Additional, we saw a decrease in the average loan size for purchase applications to the lowest amount since December 2017, [falling to] $ 298,000 from $ 313,000. This is perhaps an indication that there are less jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close the year. "

The MBA also released its mortgage credit availability index (MCAI) this week showed up credit availability in November. The MCAI rose 1.1 percent to 188.8 last month. A decline in MCAI indicates that lending standards are tightening, while an increase signals they are loosening.

"The supply of credit continues to be higher, driven once again by growth in the market," said Kan said. "There were more mortgage programs offered with high [loan-to-value] and low credit score characteristics – likely attributable to rising demand from first-time buyers. As seen in our weekly mortgage applications survey, the first half of the year, which also supports first-timers' increased presence in the market.

Corrected: An earlier version of the story incorrectly listed on the 30-year fixed-rate mortgage average at 4.71 percent. It is 4.75 percent.

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