Mortgage rates fell for a second straight week, primarily due to increased anxiety about the pandemic and its effects on the economy, Freddie Mac said.
The 30-year fixed rate mortgage was down by 4 basis points for the week ended Jan. 28, to 2.73%, its Primary Mortgage Market Survey found. That is still above the 2.65% record-low for the survey reached in the first week of January. Besides the coronavirus, the drop is attributed to investor reaction to the change in administrations, said Freddie Mac Chief Economist Sam Khater in a press release.
However, Zillow’s rate tracker, which measures mortgage offers made to consumers through its site, did reach a record low last week, Matthew Speakman, an economist for the company, noted in his weekly commentary on Wednesday evening.
“The continued spread of the virus, the introduction of new, more virulent variants, and a thus-far sluggish rollout of the vaccine all injected fresh uncertainty into markets,” Speakman said. “Uncertainty surrounding the latest proposed fiscal relief plan also lowered investors’ expectations for higher bond yields, and thus mortgage rates.”
Yields for the benchmark 10-year Treasury closed Wednesday night at 1.01%, after touching 1% during the day. This is compared with the Jan. 20 close of 1.09%.
Speakman cited comments issued by Federal Reserve Chairman Jerome Powell following its Wednesday meeting. Powell had stated that the pandemic remains the biggest hindrance to U.S. economic growth. While the economy is improving, it still needs to demonstrate substantial progress before the Fed tightens its monetary policy, which would likely lead to higher mortgage rates.
“All told, this week was yet another reminder that the pandemic continues to call the shots when it comes to mortgage rates and that sustained upward movements are unlikely until it is contained,” Speakman said.
The 30-year fixed-rate mortgage averaged 2.73% for the week ending Jan. 21, down from last week when it averaged 2.77%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.51%.
The 15-year fixed-rate mortgage averaged 2.2%, a drop of 1 bp compared with last week when it averaged 2.21%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.8% with an average 0.3 point, unchanged from the previous week. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.24%.
Source: Nationalmortgagenews.com
