The 30-year fixed-rate average fell to 4.1 percent. (J. Lawler Duggan for The Washington Post)

Concerns about the U.S.-China trade feud pushed mortgage rates lower this week.

According to data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.1 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 4.14 percent a week ago and 4.55 percent a year ago.

The 15-year fixed-rate average slid to 3.57 percent with an average 0.4 point. It was 3.60 percent a week ago and 4.01 percent a year ago. The five-year adjustable-rate average ticked down to 3.63 percent with an average 0.4 point. It was 3.68 percent a week ago and 3.77 percent a year ago.

Weekly averages for popular mortgage types

With investors’ anxiety increasing after President Trump threatened to further raise tariffs on Chinese goods, the yield on the 10-year Treasury sank to its lowest level in a month Tuesday, dropping to 2.45 percent. It recovered slightly on Wednesday, rising to 2.49 percent but still below where it was at the beginning of May.

“The president’s message fanned the flames of a trade dispute that had previously appeared to be nearing its conclusion,” said Matthew Speakman, an economic analyst at Zillow. “Investors subsequently fled to a safe haven in the form of bonds, which pushed mortgage rates downward.”

Mortgage rates tend to follow the same path as long-term bonds. When bond yields fall, home-loan rates usually move lower, as well.

Because of the uncertainty surrounding the trade talks, it is difficult to predict where rates are headed. However,, which puts out a weekly mortgage rate trend index, found that more than three-quarters of the experts it surveyed expect rates to go down in the coming week.

“If this trade deal breaks off and tariffs rise, we can see more weakness in future global trade data and stocks can sell off since we are near all-time highs,” said Logan Mohtashami, senior loan officer at AMC Lending Group in Irvine, Calif. “If a deal is made or an extension happens on Friday, look for the 10-year yield to be in a range of 2.44 to 2.58 percent for some time. Even with the solid jobs data and the 3.2 percent [first-quarter] GDP, we are all waiting for this Friday to see where this trade spat takes us on yields.”

Meanwhile, two consecutive weeks of rate declines caused mortgage applications to pick up for the first time in weeks. According to the latest data from the Mortgage Bankers Association (MBA), the market composite index — a measure of total loan application volume — increased 2.7 percent from a week earlier. The refinance index ticked up 1 percent from the previous week, while the purchase index rose 4 percent.

The refinance share of mortgage activity accounted for 37.9 percent of all applications.

“The spring buying season continues to show strength, with purchase activity rising 5 percent both weekly and annually,” said Bob Broeksmit, president and chief executive of MBA.

“Healthy economic growth, an outstanding labor market and low mortgage rates are fueling home buyer interest in most of the country. Purchase applications have now risen year over year for three consecutive months.”

The MBA also released its mortgage credit availability index (MCAI) this week that showed credit availability increased in April. The MCAI rose 2.1 percent, to 186 last month. An increase in the MCAI indicates that lending standards are loosening, while a decrease signals that they are tightening.

“Credit supply increased 2 percent in April and was driven by a 7 percent gain in the jumbo index, which reached its highest level since the beginning of the MCAI in 2011,” Joel Kan, an MBA economist, said in a statement. “Additionally, investors continued a trend from March of further increasing their willingness to purchase more [non-qualified mortgage] and non-agency jumbo loans. The high-end of the purchase market had shown weakness earlier this year, before the recent decline in mortgage rates, and it appears investors are trying to remain competitive in that segment of the market.”

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