An investor flight to safety to U.S. Treasuries, resulting from volatility in the global markets, pushed average fixed mortgage rates down slightly during the week ended July 9, according to Freddie Mac's Primary Mortgage Market Survey.
The average rate for a 30-year fixed-rate mortgage (FRM) was 4.04%, down from 4.08% the previous week. A year ago at this time, the 30-year FRM averaged 4.15%.
The average rate for a 15-year FRM was 3.20%, down from 3.24%. A year ago at this time, the 15-year FRM averaged 3.24%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.93%, down from 2.99%. A year ago, the five-year ARM averaged 2.99%.
The average rate for a one-year Treasury-indexed ARM was 2.50%, down slightly from 2.52%. At this time last year, the one-year ARM averaged 2.40%.
‘Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China,’ says Sean Becketti, chief economist, Freddie Mac. ‘Mortgage rates fell as well, although not by as much as government bond yields. The rate on 30-year fixed-rate mortgages fell four basis points to 4.04 percent.
‘Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases,’ Becketti adds. ‘In addition, 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. to ascertain the appropriate moment to begin raising short-term interest rates. As a result, mortgage rates may remain in the neighborhood of four percent for a while.’