Mortgage rates dipped for the second consecutive week in May after weeks of steady increases in March and April, according to Freddie Mac’s [1]Primary Mortgage Market Survey. [2]
Rates increased from March 28 to April 25, with 30-year fixed rates peaking at 4.20% during that time.
For the week ending on May 9, the report states that 30-year fixed rate mortgages are 4.10%, 15-year fixed rate mortgages are 3.57% and ARM’s are 3.63%. The drop in 30-year fixed rate mortgages fell slightly from 4.14% for the week ending on May 2.
A year ago at this time, the 30-year fixed rate mortgage averaged 4.55%.
“Investors wary of the current economic situation due to ongoing trade disputes resorted to the bond market, causing the 10-year treasury yield to decrease,” said Sam Khater, Freddie Mac’s Chief Economist. “A combination of low mortgage rates, a strong job market and modest wage growth should spur homebuyer interest and also serve as an incentive for homeowners looking to refinance this spring.”
Thirty-year fixed-rate-mortgages opened the year at 4.51%, and haven’t been this low since coming in at 4.06% on March 28.
Danielle Hale, Chief Economist for realtor.com [3], commented on the report, saying mortgage rates slipped again this week after tweets from President Donald Trump “sparked renewed fears” of a trade war between the U.S. and China.
“Investors have reacted by moving out of stocks and into safer bond assets, driving down longer-term rates. Mortgage rates are 45 basis points below year-ago levels,” Hale said. “For the typical home on the market, lower rates mean nearly $65 less on a monthly payment compared with last year, assuming 80 percent of the purchase price is financed. However, if you factor in today’s higher home prices, buyers are actually paying nearly $60 more for a home, as higher prices have more than completely eaten into the discount from lower rates.
“With additional trade uncertainty likely in the days ahead, mortgage rates could move even lower, but if the U.S. and China reach a favorable trade deal, rates could make a quick about-face.”