Mortgage rates down as investors react to Japan crisis
Mortgage rates fell to the lowest level in almost two months, tracking a drop in Treasury yields as Japan's deepening nuclear crisis spurred demand for relatively safe investments.
The average rate for 30-year fixed loans declined to 4.76 percent this week from 4.88 percent last week, according to Freddie Mac. The average 15-year rate was 3.97 percent, down from 4.15 percent.
The average rate on adjustable-rate mortgages that are fixed for the first five years was 3.57 percent this week, down from 3.73 percent last week. Rates on one-year ARMs averaged 3.17 percent, down from 3.21 percent.
Yields on 10-year Treasury notes, which are benchmarks for some consumer loans, fell this week to the lowest level since December, and stocks sank, reflecting investors' concern about the situation in Japan.
"There's been a little flight to - I don't want to say safety - quality," said Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan data in Pompton Plains, N.J. "As long as trouble remains in the forefront, interest rates are likely to be lower than they otherwise would be."
Mortgage applications fell 0.7 percent in the week ended March 11, according to the Mortgage Bankers Association. The association's measure of purchase applications declined 4 percent; refinancings climbed 0.9 percent.
Housing starts plunged to a 22-month low in February, and permits for construction fell to a record low, the Commerce Department said. Homebuilders are competing with foreclosures and falling prices for existing homes.
Mortgage rates began climbing from a record low of 4.17 percent in the week ended Nov. 11 and reached a 10-month high of 5.05 percent in February.
- From news services