US 30-year mortgage rate declines to lowest in three months

[WASHINGTON] US mortgage rates fell, with the 30-year average dropping to a three-month low, as investors exited stocks and commodities for the safety of government bonds.

The average rate for a 30-year fixed mortgage was 3.81 per cent, down from from 3.92 per cent last week, Freddie Mac said in a statement Thursday. It was the lowest since late October. The average 15-year rate fell to 3.1 per cent from 3.19 per cent, according to the McLean, Virginia-based mortgage-finance company.

The collapse of oil prices, which are at a 12-year low, and anxieties over falling stocks drove down yields for the government bonds that guide mortgage costs. Yields on the benchmark 10-year note declined to their lowest level since October.

The housing recovery lost momentum toward the end of 2015. New-home construction in the US unexpectedly fell in December, dropping 2.5 per cent to a 1.15 million annualized rate, according to a Commerce Department report Wednesday. Contracts to purchase previously owned US homes slumped in November, declining 0.9 per cent after a revised 0.4 per cent gain the prior month, the National Association of Realtors said.

BLOOMBERG