Mortgage rates fell to their lowest level in three months, possibly because investors became nervous following the spread of a coronavirus in China and elsewhere.
"Steady retail sales and encouraging home construction data gave rates a nudge late last week, but news of a coronavirus outbreak prompted investors to seek out safer assets, erasing those gains," Zillow economist Matthew Speakman said when that company released its rate tracker.
The average for the 30-year and 15-year fixed-rate loan fell five basis points from the previous week, according to the Freddie Mac Primary Mortgage Market Survey.
"Rates fell to the lowest level in three months and are about a quarter point above all-time lows," Sam Khater, Freddie Mac's chief economist, said in a press release. "The very low rate environment has clearly had an impact on the housing market as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment."
The 30-year fixed-rate mortgage averaged 3.6% for the week ending Jan. 23
The 15-year fixed-rate mortgage averaged 3.04%, down from last week when it averaged 3.09%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.88%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.28% with an average 0.3 point, down from last week when it averaged 3.39%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.9%.
An increase in mortgage rates is unlikely for the short term, Speakman said.
"Perhaps surprisingly, major geopolitical developments over the past month — stories that dictated most of mortgage rates' movements through 2019 — have failed to let rates loose in any meaningful way. Inflation is running below target and the Federal Reserve appears unlikely to raise the federal funds rate in the near future, so upward pressure on mortgage rates is limited for the time being," he said.
"With a shortage of market-moving data on tap, and barring a monumental development on the trade front, this minimal upward pressure on rates is unlikely to strengthen in the coming days."
