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US mortgage rates retreat for first time in 3 weeks
AFTER three weeks of increases, US mortgage rates fell back this week - but it looks to be only a temporary decline. According to the latest data released on Thursday by Freddie Mac, the 30-year fixed-rate average slid to 3.69 per cent with an average 0.5 point. Points are fees paid to a lender equal to one per cent of the loan amount and are in addition to the interest rate. The 30-year fixed-rate average was 3.78 per cent a week ago and 4.94 per cent a year ago.
The 15-year fixed-rate average dropped to 3.13 per cent with an average 0.4 point. It was 3.19 per cent a week ago and 4.33 per cent a year ago. The five-year adjustable rate average slipped to 3.39 per cent with an average 0.3 point. It was 3.43 per cent a week ago and 4.14 per cent a year ago.
These days, mortgage rates are driven by the US-China trade talks. Rates swooned late last week when doubts arose over the countries' tentative pact. But news earlier this week that both sides were considering rolling back some of the tariffs is causing rates to rise again.
That news, which came too late to be factored into the Freddie Mac survey, prompted yields on the 10-year Treasury, which had dropped to 1.69 per cent on Oct 1, to rebound to 1.86 per cent on Tuesday.
Mortgage rates tend to follow the same path as long-term bonds. When yields rise, rates tend to also go up.
Bankrate.com, which puts out a weekly mortgage rate trend index, found the experts it surveyed nearly divided on where rates are headed. About half say rates will move higher in the coming week. But others say they will remain about the same.
Meanwhile, mortgage applications were flat again last week. According to the latest data from the Mortgage Bankers Association (MBA), the market composite index - a measure of total loan application volume - decreased 0.1 per cent from a week earlier.
The refinance index ticked up 2 per cent, while the purchase index fell 3 per cent. The refinance share of mortgage activity accounted for 59.5 per cent of all applications. "The average loan size for both refinance and purchase applications remains elevated, which indicates that homeowners with larger loan balances and home buyers in the upper end of the market are more active right now," said Bob Broeksmit, MBA president and CEO. WP