Rates for home loans fell for the fourth straight week, and the benchmark mortgage product matched its low for 2019, as financial market turmoil offered a reprieve for house hunters.
The 30-year fixed-rate mortgage averaged 4.06% in the May 23 week, Freddie Mac said Thursday. That was down just 1 basis point, but brought the popular loan product to its lowest in two months. So far this year, the 30-year-fixed has risen in only six weeks.
The 15-year fixed-rate mortgage averaged 3.51%, down from 3.53%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.68%, up from 3.66%.
Fixed-rate mortgages follow the 10-year U.S. Treasury noteTMUBMUSD10Y, -1.47% , although they lag behind the moves in the bond market a bit.
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The 10-year yield is at its lowest in 18 months, thanks mostly to the escalating U.S.-China trade war, and increasing signs of slowing domestic growth. Data released Thursday saw a May manufacturing survey at the lowest level in nearly a decade.
The housing market has pushed through the soft spot it encountered in 2018, but some old familiar headwinds are capping growth now. Sales of previously-owned homes have risen in only one month so far in 2019, the National Association of Realtors said Tuesday, but homes are flying off the market — a sign that more inventory would likely result in higher sales volume.
And despite an overall strong economy, Americans aren’t exactly flush. A recent survey from debt settlement provider Freedom Debt Relief found consumers see many barriers to home buying this year. The biggest one, with 28% of respondents flagging it, was the cost of the down payment, but 26% said the monthly payment was a concern. About 11% said there was a lack of homes that fit my needs, and 14% said they were unsure about the economy.
One small perk of lower rates: a resurgence in rate refinancings. According to the Mortgage Bankers Association, refinances increased 8% in the most recent week to the highest level in over a month. Purchase mortgage applications dipped, even as rates fell, however. “We’re keeping a close eye on whether there may be some adverse effects of the ongoing global trade disputes on overall demand,” the group said Wednesday. “Some potential homebuyers may be delaying their home search until there’s more certainty.”