With investors fleeing to the safety of government bonds, yields moved lower. The movement of the 10-year Treasury bond is one of the best indicators whether mortgage rates will rise or fall. When yields drop, home loan rates tend to go down as well.
As the housing market moves into the spring buying season, lower mortgage rates should help affordability.
The 30-year fixed-rate average slipped to 3.71 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.73 percent a week ago and 3.69 percent a year ago. The 30-year fixed rate has remained below 4 percent since late December.
The 15-year fixed-rate average dropped to 2.96 percent with an average 0.4 point. It was 2.99 percent a week ago and 2.97 percent a year ago. The 15-year fixed rate has stayed under 3 percent since early February.
The five-year adjustable-rate average fell to 2.89 percent with an average 0.5 point. It was 2.93 percent a week ago and 2.92 percent a year ago.
“The Federal Reserve’s decision last week to maintain the current level of the Federal funds rate combined with the reduction in their forecast for growth triggered a 3-basis point drop in the 10-year Treasury yield,” Sean Becketti, Freddie Mac chief economist, said in a statement.
“However, comments this week by several members of the Fed, including the presidents of the Richmond, San Francisco, and Atlanta banks, indicated that a June rate hike is still on the table.”
Meanwhile, mortgage applications were down, according to the latest data from the Mortgage Bankers Association.
The market composite index — a measure of total loan application volume — fell 3.3 percent from the previous week. The refinance index dropped 5 percent, while the purchase index slipped 1 percent.
The refinance share of mortgage activity accounted for 53.9 percent of all applications.