Mortgage rates declined over the past week as worried investors increased their purchases of 10-year Treasuries, according to Freddie Mac.
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The 30-year fixed-rate mortgage averaged 4.55% for the week ending June 28, down from last week when it averaged 4.57%. Average mortgage rates have now retreated in four of the past five weeks. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.88%.
"The decrease in borrowing costs are a nice slice of relief for prospective buyers looking to get into the market this summer. Some are undoubtedly feeling the affordability hit from swift price appreciation and mortgage rates that are still 67 basis points higher than this week a year ago," Freddie Mac Chief Economist Sam Khater said in a press release.
The 10-year Treasury yield, which the 30-year fixed rate mortgage is benchmarked to, reached its most recent peak on June 20, at 2.937%. Since then, it's moved downward, closing on June 26 at 2.880%. On the next day it fell even further to 2.827%, as investors moved money into the bond market over concerns on President Trump's foreign trade policy.
And that is likely to drive rate movement in the near term.
"International trade and geopolitical news is likely to dominate headlines over the next week — including continued U.S.-China developments and looming decisions about European trade arrangements post Brexit — as markets take a break going into the Fourth of July holiday," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on June 27.
Freddie Mac has a bullish outlook for the housing market this summer.
"As highlighted in our June forecast, the economy and housing market overall are on solid footing this summer, which should support continued strength in housing demand. Home price growth is still high, but is expected to moderate, and while sales activity has slowed, it's primarily because of stubbornly low supply," Khater said
The 15-year fixed-rate mortgage this week averaged 4.04%, unchanged from last week. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.17%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87% this week with an average 0.3 point, up from last week when it averaged 3.83%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.17%.