Mortgage rates fall to lowest average in one year
Average U.S. mortgage rate fell this week to the lowest average in more than one year, potentially offering homebuyers a boost in affordability as Wall Street remains focused on global headwinds.
The 30-year fixed-rate mortgage averaged 4.35 percent in the week of Feb. 21, according to data published on Thursday by mortgage buyer Freddie Mac. That’s a decline of 0.02 percentage points from the previous week’s average of 4.37 percent.
The 15-year adjustable-rate mortgage, meanwhile, averaged 3.84 percent, down from 3.88 percent the week of Feb.14.
Reacting to concerns about a potential economic slowdown — caused by a U.S.-China trade war and uncertainties surrounding Brexit — the Federal Reserve this week signaled this week that it will take a patient approach to interest rate hikes, at least in the beginning of 2019.
The central bank’s rate hikes put upward pressure on interest rates for mortgages, credit cards and other forms of lending, raising borrowing costs for consumers.
Existing home sales fell slightly in January to 4.94 million, according to Mortgage News Daily, down 1.2 percent from December’s annual rate of 4.99 million.
“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement. “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”