A dramatic decline in last week’s 10-year Treasury yield was the main variable that had triggered this week’s mortgage rate drop on Freddie Mac’s Primary Mortgage Market Survey.
Yesterday’s Freddie Mac survey showed 30-year fixed mortgage rates declining from 4.12 percent to 4.10 percent, a slight two-point downtick but nonetheless good enough to push 30-year fixed-rate home loans to their lowest level for the calendar year. This also marks the lowest rate on Freddie Mac’s records since June 2013, right before the effects of the summer of 2013’s big mortgage rate spike were felt. 15-year FRMs were also down yesterday, slipping a single basis point from 3.24 percent to 3.23 percent.
“Mortgage rates were down slightly this week, following the decline in 10-year Treasury yields,” noted Freddie Mac vice president and chief economist Frank Nothaft, who explained the other variables that affected this week’s mortgage rate trends in an accompanying statement. “Meanwhile, housing starts in July jumped 15.7 percent to 1.093 million units after falling 4.0 percent a month earlier. Also, July’s consumer prices increased at a 0.1 percent seasonally adjusted pace, the slowest in five months.”
In a separate survey, the Mortgage Bankers Association reported yesterday that 30-year FRMs were down from 4.35 percent to 4.29 percent. Likewise, 30-year jumbo mortgage rates, or rates on home loans valued at over $417,000, were down six basis points, retreating from 4.24 percent to 4.18 percent. According to MBA chief economist Michael Fratantoni, this week’s mortgage rate drops were brought on by geopolitical concerns, primarily the ongoing crisis between Russia and Ukraine. Conventional mortgage applications were also up in the recently-concluded weekly survey. He did note, however, that mortgage applications for government loans were down by 5.9 percent.