Mortgage rates fell significantly over the past week as worries related to the ongoing trade conflict with China and the general state of health in the economy dominated the headlines.
The 30-year fixed-rate mortgage averaged 3.6% during the week ending August 8, down 15 basis points from last week, Freddie Mac reported Thursday. This is the lowest mortgage rate that has been since the 2016 presidential election.
This was the third largest weekly decline for the 30-year fixed rate loan this year – so far in 2019, the interest rate for the loan product has posted only a weekly increase on eight occasions .
The 15-year fixed-rate mortgage also fell 15 basis points to an average of 3.05%, according to Freddie Mac. The 5/1 adjustable-rate loan averaged 3.36%, representing a 10 basis point decline.
The mortgage rate traces the 10-year Treasury
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the return that has fallen sharply over the past year.
"Some millennials miss a once-in-a-lifetime opportunity."
While the Federal Reserve chose to cut the Fed fund rate last week, this change has already been priced into mortgage loans. This week's decline is likely to reflect growing concerns in the financial markets, including concerns about the ongoing US-China trade war.
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said in his report. "Business sentiment is dropping by negative headline on trade and industry, but consumer sentiment is still driven by a strong labor market and low prices that will continue to drive home sales this fall."
Ultimately, the low supply of homes available for sale will at least partially stimulate any boost that low mortgage rates would otherwise provide to the housing market.
"Prices are low, but does it matter if you can't find something you can afford?" Said Nela Richardson, an investment strategist at Edward Jones
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Business mood is down to negative headlines in trade and industry.
This is particularly bad news for home buyers who can manage to save significantly, given how home prices have reached record highs across much of the country. "Some millennials are missing out on a once-in-a-lifetime opportunity because we believe interest rates will go up again," Richardson said.
However, some experts are hesitant to say that the fall in mortgage rates through 2019 will make sense for the housing market.
The fall in mortgage rates this week led to a large increase in mortgage applications, but most of this activity centered on refinancing rather than loans used to buy homes.