Rates for home loans fell in line with the bond market as a slowing global economy increasingly sent investors to the perceived safety of fixed-income assets.
The 30-year fixed-rate mortgage averaged 4.41% in the February 7 week, mortgage guarantor Freddie Mac said Thursday. That was down from 4.46% in the prior week, the only period in which the popular product has managed an increase in 2019.
The 15-year adjustable-rate mortgage averaged 3.84%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.91%, also down 5 basis points.
Those rates don’t include fees associated with obtaining mortgage loans.
Mortgage rates track the 10-year U.S. Treasury note. Bonds have become more attractive over the past few weeks as global growth concerns have persisted. That’s good for borrowers: bond yields decline as their prices rise.
Still, there are headwinds in the housing market beyond the cost of financing a home. Brooke Anderson Tompkins is president of upstate New York-based 1st Priority Mortgage, which had what she describes a “record-breaking” 2018. Between the government shutdown and the Polar Vortex, the new year has gotten off to a much slower start, but Tompkins calls herself “cautiously optimistic” about the rest of 2019.
1st Priority tries to differentiate itself by offering innovative products, like the “Buy Before You Sell” program, which acts like a bridge loan for homeowners who are ready to make an offer on a new property before having closed on the sale of the existing one. Another, “Lock and Shop,” allows consumers to lock in a mortgage rate even if they don’t have a signed contract to buy a home.
In a housing market deeply constrained by lack of inventory, and dogged by the specter of rising rates, Tompkins told MarketWatch that “offering customers alternatives instead of saying ‘we have nothing’ is something that gets us excited.”
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