Fixed mortgage rates didn't go down much this week, but they did drop for the fourth week in a row.
According to the latest data released Thursday by Freddie Mac, the Federal Home Loan Mortgage Corp., the 30-year fixed-rate average slipped to 4.06% with an average 0.5 point. (Points are fees paid to a lender equal to 1% of the loan amount.) Rates were 4.07% a week ago and 4.66% a year ago. The 30-year fixed rate matched its lowest level of the year, set back at the end of March.
The 15-year fixed-rate average dipped to 3.51% with an average 0.4 point. It was 3.53% a week ago and 4.15% a year ago. The five-year adjustable rate average ticked up to 3.68% with an average 0.4 point. It was 3.66% a week ago and 3.87% a year ago.
Zillow economic analyst Matthew Speakman said the lack of economic data released this week meant the financial markets focused more on the U.S.-China trade negotiations.
"The one event with the potential to drastically influence rates -- the reading of the minutes from last month's Federal Open Market Committee meeting -- offered little in the way of new forward guidance, keeping bond yields, which dictate mortgage rates, at bay," Speakman said.
"The U.S.-China trade tensions -- along with other geopolitical issues such as Brexit and intensifying political tensions in the Middle East -- have pushed rates downward in recent weeks, he said. "While substantial uncertainty remains, the pace of provocative headlines has subsided in recent days, which could result in some upward pressure on rates, if the trend holds."
"A sharp rebound appears unlikely. But so long as the trade tensions don't escalate and upcoming economic releases offer few surprises, modest rate increases could be on the horizon in the immediate term," he said.
Bankrate.com, which puts out a weekly mortgage-rate trend index, found that two-thirds of the experts it surveyed expect rates to remain relatively stable in the coming week.
"Pending clear direction on the trade dispute between the United States and China, interest rates will likely be directionless," said Robert Johnson, professor of finance at Creighton University.
Meanwhile, fueled by borrowers looking to refinance their loans, mortgage applications picked up. According to the latest data from the Mortgage Bankers Association, the market composite index -- a measure of total loan application volume -- increased 2.4% from a week earlier. The refinance index grew 8% from the previous week, while the purchase index dropped 2%.
The refinance share of mortgage activity accounted for 40.5% of all applications.
"Mortgage applications increased 2.4% last week and were 15.4% higher than a year ago, with declining mortgage rates leading to a jump in refinance activity," said Bob Broeksmit, chief executive of the Mortgage Bankers Association. "Despite lower borrowing costs, purchase applications were slightly down but maintained their 14-week run of outpacing year-ago levels. Supply and affordability challenges are still slowing some prospective buyers, but most of the country continues to see strong demand."
Business on 05/24/2019
Print Headline: Fixed mortgage rates decline for 4th week