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Mortgage rates dip amid world economic concerns

(Jason Reed/Reuters)

With all the chaos in the world these days – Greece, China, Puerto Rico, not to mention falling oil prices – investors have sought safety in bonds, driving yields down. That usually pushes mortgage rates lower. Although home loan rates dipped this week, they didn’t slide very far, according to the latest data released Thursday by Freddie Mac.

The 15-year fixed-rate average edged down to 3.2 percent with an average 0.5 point. It was 3.24 percent a week ago and a year ago.

[How borrowers can help make the mortgage application process go smoother]

Hybrid adjustable rate mortgages also fell. The five-year ARM average dropped to 2.93 percent with an average 0.4 point. It was 2.99 percent a week ago and a year ago.

The one-year ARM average dipped to 2.5 percent with an average 0.3 point. It was 2.52 percent a week ago.

“Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China. Mortgage rates fell as well, although not by as much as government bond yields,” Sean Becketti, Freddie Mac chief economist, said in a statement.

“Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases. In addition, the minutes of the June meeting of the Federal Open Market Committee suggest the Federal Reserve will proceed cautiously — monitoring events both overseas and in the United States to ascertain the appropriate moment to begin raising short-term interest rates. As a result, mortgage rates may remain in the neighborhood of 4 percent for a while.”

[How to think about buying a house as the Federal Reserve thinks about raising rates]

Mortgage applications ticked up this week, according to the latest data from the Mortgage Bankers Association.

The market composite index, a measure of total loan application volume, increased 4.6 percent from the previous week. The refinance index rose 3 percent, while the purchase index jumped 7 percent.

The refinance share of mortgage activity accounted for 48 percent of all applications, its lowest level since June 2009.

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