The average mortgage rate for 15-year, fixed-rate home loans eased to 3.03% from 3.07% last week. The low borrowing rates have been a boon for homebuyers, even as global financial markets are roiled by concerns over the global economy.
U.S. stocks have rebounded this week after last week's steep plunge triggered when the bond market sent out a signal that a recession could be on the horizon. Still, markets around the world continue to be raked by anxiety over the U.S.-China trade war and slowing global economic growth.
Investors fleeing stocks to the safety of bonds have sent bond interest rates to record lows. The yield on the key 10-year Treasury note — which influences rates on long-term mortgages — ticked up to 1.59% Wednesday from 1.56% late Tuesday. It briefly dropped below the 2-year Treasury's yield for the first time in a week.
That rare so-called inversion of the Treasury yield curve has accurately predicted the past five U.S. recessions. It suggests that bond investors expect growth to slow so much that the Federal Reserve will soon feel compelled to slash short-term rates to try to support the economy.
Investors are looking ahead to a speech Friday by Fed Chairman Jerome Powell for clues about possible interest rate cuts. The climate of low home mortgage rates has sparked a flurry of activity by prospective homebuyers as well as owners looking to refinance mortgages.
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 also remained at 0.5 point. The average rate for five-year adjustable-rate mortgages fell to 3.32% from 3.35% last week. The fee was steady at 0.3 point.