The average rate for 15-year, fixed-rate home loans slipped this week to 3.26% from 3.28%. The declining rates have been a boon to potential purchasers in the spring home buying season, and the number of prospective buyers seeking mortgages jumped last month.
Mortgage applications for new home purchases increased 20.1% in May from a year earlier, according to new data from the Mortgage Bankers Association. A reprieve for nervous stock-market investors came this week in the U.S. trade dispute with Mexico, as the two sides reached a truce Friday after Mexico agreed to do more to stop the flow of Central American migrants into the U.S. But by Monday, President Donald Trump was again threatening to slap crippling tariffs on Mexican exports if Mexico didn't abide by an unspecified commitment, "to be revealed in the not-too-distant future."
The U.S. trade battle with China continues to fester. The trade fights threaten to stifle economic growth in the U.S. and around the world. Investors have been mostly fleeing to safer investments, like bonds and gold, because of the uncertainty around trade negotiations.
The rush into the bond market has pushed up bond prices and depressed their yields. The yield on the 10-year Treasury note, which influences mortgage rates, was 2.12% late Wednesday, unchanged from a week earlier. It fell to 2.10% around midday Thursday.
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 rose to 0.6 point this week from 0.5 point. The average fee for the 15-year mortgage was unchanged at 0.5 point. The average rate for five-year adjustable-rate mortgages declined to 3.51% from 3.52% last week. The fee remained at 0.4 point.