Average mortgage rates hold steady amid global trade disputes
Market reaction to the trade dispute with China led to a modest decline in mortgage rates this week, but that shouldn't affect home sales in the coming months, Freddie Mac said.
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The 30-year fixed-rate mortgage averaged 4.07% for the week ending May 16, down from last week when it averaged 4.1%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.61%.
"Modestly weaker consumer spending and manufacturing data, along with continued jitters around trade policy, caused interest rates to decline throughout the yield curve," Sam Khater, Freddie Mac's chief economist, said in a press release. "While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates, which will drive up home sales this summer."
Because there was little economic news released this past week, the market was driven by the varying headlines involving the trade dispute, Matthew Speakman, an economic analyst at Zillow, said when that company released its rate tracker.
"In general, the ongoing tensions have kept risky assets under pressure, causing markets to seek out the safety of Treasurys and pushing mortgage rates down. This flight to safer assets accelerated on May 15 after industrial production and retail sales data from both the U.S. and China failed to meet analysts' expectations," Speakman said.
"The combination of reports exacerbated worries that the newly intensified trade conflict will stunt the growth of the global economy, which was recently showing signs of strength. Trade-related headlines should continue to dominate market movements in the coming days."
The 15-year fixed-rate mortgage this week averaged 3.53%, down from last week when it averaged 3.57%. A year ago at this time, the 15-year fixed-rate mortgage averaged 4.08%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.66% with an average 0.4 point, up from last week when it averaged 3.63%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.82%.