Mortgage markets improved last week as a global flight-to-quality continued. With Spain facing questions on its sovereign debt, investors continued to pare exposure to risky assets, sparking demand for the relative safety of U.S. government-backed and mortgage-backed bonds.
As a result, conforming and FHA mortgage rates slipped for the third straight week last week.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage available to borrowers is down to 3.88% nationwide with an accompanying 0.7 discount points plus “typical” closing costs.
Last week’s reported 3.88% rate for the 30-year fixed rate mortgage is within one-tenth of one percent of the lowest average mortgage rates in Freddie Mac survey history.
Fifteen-year fixed mortgage rates are also at record lows. Borrowers willing to pay 0.7 points plus closing costs were able to get an average interest rate of 3.11%.
Last week, the markets moved on momentum. This week, they’ll move on data with a busy economic calendar:
- Monday: Retail Sales; Housing Market Index
- Tuesday: Housing Starts
- Thursday: Weekly Jobless Claims; Leading Indicators; Existing Home Sales
As long as economic uncertainty weighs on financial markets, we’ll probably continue to see favorable conditions for mortgage rates.
However, as we’ve seen recently, interest rates can be highly volatile. If you’ve found a favorable mortgage deal, make sure you jump on it. Just because economic conditions are favorable overall for mortgage rates doesn’t rule out the possibility of aggressive rates spikes from time to time.