Mortgage rates tumbled for the second week in a row as long-term bond yields fell to their lowest level in a month.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slid to 4.14 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.23 percent a week ago and 3.71 percent a year ago.
The 15-year fixed-rate average dropped to 3.39 percent with an average 0.4 point. It was 3.44 percent a week ago and 2.98 percent a year ago. The five-year adjustable rate average slipped to 3.18 percent with an average 0.4 point. It was 3.24 percent a week ago and 2.90 percent a year ago.
The failure by the House of Representatives to pass health-care legislation last week fueled the move by investors from stocks to bonds, driving down yields. The yield on the 10-year Treasury fell to 2.38 percent Monday, its lowest level since late February.
Because mortgage rates tend to follow the movement of long-term bonds, home loan rates also dropped.
Rates aren’t expected to move much in the coming week. According to Bankrate.com, which puts out a weekly mortgage rate trend index, nearly two-thirds of the experts it surveyed say rates will remain relatively stable, moving up or down less than two basis points. (A basis point is 0.01 percentage point.) Logan Mohtashami, a senior loan officer with AMC Lending Group, is one who predicts home loan rates will hold steady.
“Once again we are in a tight range for the bond market from 2.27 percent to 2.62 percent and we haven’t broken either level once,” Mohtashami said. “Pricing for rates will stay in the same range until something on the macroeconomic side or headline side gets us over or under this channel in yields for the 10-year [Treasury].”
In addition to lower mortgage rates, which increases affordability, more good news arrived for the housing market this week. Pending home sales were up 5.5 percent in February, according to the National Association of Realtors. New-home sales also rose last month.