Rates for home loans fell to the lowest in a year as inflation cooled and investors braced for a slowing global economy.
The 30-year fixed-rate mortgage averaged 4.37% in the February 14 week, mortgage guarantor Freddie Mac said Thursday. That was down from 4.41% in the prior week. The 15-year adjustable-rate mortgage averaged 3.81%, down three basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.88%, down from 3.91%.
Those rates don’t include fees associated with obtaining mortgage loans.
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Mortgage rates track the 10-year U.S. Treasury note. Bonds have become more attractive over the past few weeks amid global growth concerns and worries about a possible second government shutdown. That’s good news for borrowers: bond yields decline as their prices rise.
The popular 30-year-fixed has increased in only one week so far this year, and has averaged 4.44% compared to 4.54% for all of 2018.
Last year was a rocky one for many local housing markets, especially higher-priced ones, and the late-year surge in rates didn’t help. But for Andi DeFelice, a real estate agent in Savannah, Ga., market conditions have been “steady.”
“Six months ago it was a strong seller’s market, but that’s calmed down a little, taken a bit of a turn,” DeFelice said. “Inventory is picking up a bit. It’s starting to become, not a buyer’s market necessarily, but a bit more balanced. Sellers are getting reasonable prices and buyers are paying reasonable prices. Right now it’s a sweet spot.”
The recent lull in mortgage rates has been “phenomenal” for her clients, DeFelice told MarketWatch. “It’s opening up doors for buyers that might not have been opened up a month and a half ago.”
DeFelice works exclusively with buyers and has been encouraged by a recent rush of millennial clients reaching out, even as owners increasingly sell their homes to companies as an investment, rather than listing on the open market. “The younger generation is realizing that they need someone working on their side of the transaction,” she said.