Mortgage rates

A closely watched auction of 30-year Treasuries saw stronger-than-expected demand on Thursday, easing for now worries that investors would shun the US government's longest maturity.

The wholesaler, which provides 2% down payment assistance as part of the program, previously offered it until May 2024, when it was replaced by a 0% down loan.

The 30-year fixed rate mortgage moved one basis point lower this week, remaining in the same range since it spiked in mid-April, Freddie Mac said.

Mortgage applications rose 12.5% from last week, breaking a month-long streak of decline and offering a positive note as summer approaches.

While lenders have come out with more products for the spring season, rate lock data finds buyers still hesitant to act because of high mortgage rates.

The Treasury is set to sell $22 billion of 30-year government bonds on Thursday. The results will receive special attention because they will offer an instant readout on the scope of market demand at a time when investor appetite for 30-year US debt has soured. 

Treasuries slumped after stronger-than-expected US job and wage growth prompted traders to trim bets that the Federal Reserve will cut interest rates this year. 

However, some aspects of the latest employment statistics from the Bureau of Labor Statistics point to gradual weakening in the economy.

Even with the four basis-point drop, the 30-year fixed rate mortgage remained at levels last seen in February as the Spring homebuying season reaches its climax.

Two- to 10-year yields reached the lowest levels since at least May 9 after the ISM Services gauge for last month signaled contraction for the first time since last June.