Relief in Mortgage Rates Likely to Stick Around
Average fixed-rate mortgages moved lower this week, helping to keep buyer activity strong toward the close of the spring homebuying season, Freddie Mac reports in its weekly mortgage market survey.
“Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China,” says Sean Becketti, Freddie Mac’s chief economist. “Mortgage rates fell as well, although not by as much as government bond yields. The rate on 30-year fixed-rate mortgages fell 4 basis points to 4.04 percent. Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases.”
Also, Becketti notes that the minutes of the June meeting of the Federal Open Market Committee suggest the Federal Reserve will proceed cautiously — monitoring events both overseas and in the U.S. in determining when to begin raising short-term interest rates.
“As a result, mortgage rates may remain in the neighborhood of 4 percent for a while,” Becketti notes.