A volatile week in the financial markets had little effect on mortgage rates

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dipped to 4.07 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 4.10 percent a week ago and 4.61 percent a year ago. The 30-year fixed rate has gone down for three weeks in a row.

The 15-year fixed-rate average slid to 3.53 percent with an average 0.4 point. It was 3.57 percent a week ago and 4.08 percent a year ago. The five-year adjustable rate average ticked up to 3.66 percent with an average 0.4 point. It was 3.63 percent a week ago and 3.82 percent a year ago.

Worries that trade tensions with China and heightened hostility against Iran will threaten the global economy caused turbulence in the financial markets this week. The Dow Jones industrial average took a tumble Monday before recovering the next two days.

Mortgage rates are influenced by investor expectations. When investors are spooked, they tend to shift to safer assets such as bonds. The rally in the bond market drove the yield on the 10-year Treasury down to nearly an 18-month low. It fell to 2.37 percent Wednesday, a drop of almost 20 basis points since early this month. (A basis point is 0.01 percentage point.)

So far, mortgage rates haven’t gone down as dramatically.

“Rates were buoyed, at times, by assertions that the [U.S.-China trade] disagreement could be resolved in the next couple of months,” said Matthew Speakman, a Zillow economic analyst. “In general, however, the ongoing tensions have kept risky assets under pressure, causing markets to seek out the safety of Treasurys and pushing mortgage rates down.”

Despite the decline in the 10-year Treasury yield, many experts aren’t expecting mortgage rates to continue falling. Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed say rates will remain relatively stable in the coming week.

“President Trump’s escalation in the trade war with China has intensified, and mortgage rates and Treasury yields are dropping as a result,” said Michael Becker, branch manager at Sierra Pacific Mortgage in White Marsh, Md. “Rates are now near the lows for 2019 that we reached in March. Given the drop in rates over the last few weeks, I don’t see them dropping further.”

Meanwhile, mortgage applications slowed. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — decreased 0.6 percent from a week earlier. The refinance index slipped 1 percent from the previous week, while the purchase index declined 1 percent.

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

“Despite the modest decline, low rates and the healthy economy continue to propel activity higher than the same time last year,” said Bob Broeksmit, MBA president and CEO. “Purchase applications were up 7 percent, and refinance activity was nearly 17 percent above a year ago.”