Fixed mortgage rates have dropped for an eighth straight week. The average rate on the 30-year loan fell to 4.49 percent from 4.55 percent, Freddie Mac said Thursday. The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.68 percent from 3.74 percent. Both are lows for the year.
Rates tend to track the yield on the 10-year Treasury note. The 10-year yield has been dropping as investors have snapped up Treasurys over fears that the economy is slowing.
Demand for homes is restrained by stricter lending standards and high unemployment. U.S. companies in May added the fewest jobs in eight months. Unemployment unexpectedly ticked up to 9.1 percent from 9 percent in April.
The average rate on a five-year adjustable-rate mortgage fell to 3.28 percent. The five-year adjustable-rate loan hit 3.25 percent in November, the lowest rate on records dating back to 2005.
The average rate on a one-year adjustable-rate loan fell to 2.95 percent. That’s the lowest on records going back to 1986.
Declining borrowing costs are encouraging homeowners to reduce their monthly payments. The Mortgage Bankers Association’s measure of refinancing rose 1.3 percent in the week ending June 3. The group’s purchasing gauge dropped 4.4 percent.
The average rate for a 30-year fixed loan is below where it was last year at this time, when it was 4.72 percent, according to Freddie Mac. It fell to a record 4.17 percent in November.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The average fee was 0.7 for the 30-year and 15-year fixed loans in Freddie Mac’s survey. The average fee for the five-year ARM and the 1-year ARM was 0.5 point.