Mortgage rates mixed this week after hitting all-time lows
WASHINGTON (AP) — U.S. long-term mortgage rates were mixed this week after hitting all-time lows last week amid anxiety over risks to the economy from the deepening coronavirus crisis.
The average rate on the benchmark 30-year loan rose to 3.36% from 3.29% last week — which was the lowest level since mortgage buyer Freddie Mac started tracking it in 1971.
The average rate on the 15-year fixed-rate mortgage slipped to 2.77% from 2.79% last week.
The World Health Organization on Wednesday declared the viral outbreak a pandemic. By the latest count about 126,000 people have been infected worldwide, 68,000 have recovered and 4,600 have died.
Financial markets continued to shudder Thursday amid a cascade of cancellations and shutdowns across the globe due to the COVID-19 virus, and rising worries that the Trump White House, Congress and other authorities around the world can’t or won’t help the weakening economy any time soon.
The decline in mortgage rates has been driven by investors shifting money out of the stock market and into the safety of U.S. Treasurys as the crisis in confidence around the global viral outbreak has worsened. Long-term mortgage rates tend to track the yields on the 10-year Treasury note, so they typically fall in tandem.
For the second time this week, U.S. stock prices tumbled so sharply at the opening bell Thursday that a circuit breaker meant to slow panic trading was triggered on Wall Street, halting all activity for 15 minutes. The Dow Jones Industrial Average closed in a bear market Wednesday for the first time in more than a decade. The average was down more than 2,200 points, or 9%, at midday Thursday, while the broader Standard & Poor’s 500 index was off around 8.6%.
The record low mortgage rates have been a boon to potential homebuyers, and they give many homeowners an opening to refinance into lower-rate loans to free up money to spend or save.
But prospective buyers may be reticent to shop for homes amid the coronavirus outbreak, seeking to avoid social contact, experts note. That could slow home sales. And ultra-low mortgage rates aren’t likely to produce a significant rise in home sales this year because the supply of homes for sale remains at historic lows.
Each week, Freddie Mac surveys lenders to compile its national mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to obtain the lowest rates.
The average rate for a five-year adjustable-rate mortgage dropped this week to 3.01% from 3.18% last week.