President Donald Trump’s easing of tariffs against Mexico helped stabilize the markets and kept the 30-year fixed rate mortgage at 3.82%, according to Freddie Mac’s Primary Mortgage Market survey.
“Mortgage rates were mostly unchanged from last week due to easing of trade tensions with Mexico which helped stabilize markets. These historically low rates should provide continued opportunities for current homeowners to refinance their mortgages – which combined with new homebuyer activity – will help sustain the momentum in the housing market in 2019,” said Sam Khater, Freddie Mac’s Chief Economist.
Freddie Mac reports that the average rate for a 30-year fixed rate mortgage has dropped 0.80% year-over-year, while the 15-year fixed rate mortgage fell 0.02% this past week to 3.26%.
“Mortgage rates broke their 6-week decline this week and held relatively steady as the Mexican tariff deal offset continued concerns over global economic growth,” said Danielle Hale, Chief Economist for realtor.com. “Even though bond rates bounced slightly higher, they remain at levels that are nearly 60 to 70 basis points lower than a year ago.”
Hale continued to say, “Investors can expect more volatility on the horizon in response to next week’s Fed meeting. If the Fed echoes concerns that the U.S. and global economies could be slowing, it may spark another round of rate declines and raise expectations that a Fed rate could be on the horizon. However, the market has already reacted to a high likelihood of a rate cut by July's Fed meeting. Rates could head higher if the Fed statement is less indicative of a cut than investors are already expecting.”
The issue of tariffs was a topic of the National Association of Home Builders (NAHB) in June, as the NAHB stated tariffs on $10 billion worth of building materials has impacted housing affordability.
According to the report, regulations account for 25% of the price of a single-family home, and 30% of the cost of a multi-family development.
“Removing regulatory barriers that contribute to the increased costs of housing will pave the way to homeownership,” said NAHB Chairman Greg Ugalde, a builder and developer from Torrington, Connecticut. “Home builders and the residential construction community are committed to working with Congress to ensure homeownership is within reach of hard working families.”