30-Year Mortgage Rate Falls Below 4% to a 2-Month Low

The 30-year fixed-rate mortgage fell 6 basis points to 3.98 percent this week, moving just below 4 percent for the first time since the week of June 4.
The longterm rate has bounced between 3.98 and 4.09 percent since the first full week of June, falling some when events overseas take a turn for the worse and rising when the “clouds appear ready to part,” says Sean Becketti, chief economist for Freddie Mac.

Freddie Mac reports that the 30-year fixed-rate mortgage averaged 3.98 percent, with an average 0.6 point, for the week ending July 30, 2015, down from last week when it averaged 4.04 percent.
A year ago at this time, the 30-year FRM averaged 4.12 percent.
“Monday’s 8 percent decline in Chinese stock prices triggered similar — though smaller — sell-offs in global equity markets,” says Becketti. “The associated flight to quality drove U.S. Treasury yields down nearly 5 basis points.”
Bond yields for Treasurys were pushed lower by a rise in bond prices, as investors sought safety in U.S. Treasury bonds.
Recent housing data were mixed in recent days, following the same good news/bad news pattern as overseas developments, says Becketti.
Before this week, existing-home sales for June and the latest house-price measures both suggested a stronger housing market.
“However this week brought nothing but bad — or at least weaker-than-expected — news. New homes sales and pending home sales both weakened, and the Case-Shiller house price indices, while positive, fell below the lower end of expectations,” he said.
Finally, the inadvertent release of Federal Reserve staff projections increased uncertainty over the timing of future rate moves by the central bank. It was widely expected that policy makers would begin to raise short-term rates before year’s end.
Here are the rates for other mortgage products this week, according to Freddie Mac:
15-year fixed-rate mortgage this week averaged 3.17 percent with an average 0.6 point, down from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.95 percent this week with an average 0.4 point, down from last week when it averaged 2.97 percent. A year ago, the 5-year ARM averaged 3.01 percent.
1-year Treasury-indexed ARM averaged 2.52 percent this week with an average 0.3 point, down from last week when it averaged 2.54 percent. At this time last year, the 1-year ARM averaged 2.38 percent.

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