The average rate for 15-year, fixed-rate home loans declined this week to 3.51% from 3.53% last week. The U.S.-China trade war continued to fester this week, with negotiations on hold after the Trump administration slapped new tariffs on $200 billion in Chinese imports and Beijing retaliated with tariffs on $110 billion of U.S. products.
Investors appear to be bracing for the trade dispute to become entrenched, and stock prices have fallen sharply around the globe in a continued volatile market. Investors are concerned that a prolonged trade war could hurt the U.S. economy and corporate profits, and they continue to shift money from volatile stocks to the bond market.
Bond yields fall as prices rise. The yield on the 10-year Treasury note, which influences mortgage rates, was 2.38% late Wednesday, close to 2.37% a week earlier. But it dropped to 2.33% Thursday morning, its lowest level in more than a year.
With mortgage rates at historically low levels, prospective homebuyers have been rushing in. Applications for mortgage loans jumped 2.4% in the week ended May 17 from a week earlier, according to the Mortgage Bankers Association.
Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates.
The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.5 point. The average fee for the 15-year mortgage held at 0.4 point. The average rate for five-year adjustable-rate mortgages rose to 3.68% from 3.66% last week. The fee remained at 0.4 point.