Despite an economy that appears to be strengthening, mortgage rates continued to hover below 3% this week. They have not been above 3% the past two months.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average fell to 2.96% with an average 0.7 point. (Points are fees paid to a lender equal to 1% of the loan amount. They are in addition to the interest rate.) It was 2.99% a week ago and 3.21% a year ago.

Freddie Mac, the federally chartered mortgage investor, aggregates rates from around 80 lenders across the country to come up with weekly national averages. It uses rates for high-quality borrowers with strong credit scores and large down payments. Because of the criteria, these rates are not available to every borrower.

The survey is based on home purchase mortgages, which means rates for refinances may be higher. The price adjustment for refinance transactions that went into effect in December is adding to the cost. The adjustment, which applies to all Fannie Mae and Freddie Mac refinances, is 0.5% of the loan amount. That works out to $1,500 on a $300,000 loan.

The 15-year fixed-rate average slid to 2.23% with an average 0.6 point. It was 2.27% a week ago and 2.62% a year ago. The five-year adjustable rate average dropped to 2.55% with an average 0.2 point. It was 2.64% a week ago and 3.1% a year ago.

"The downward shift in rates, and the bond yields that influence them, has been perplexing for markets as there was not an obvious reason for such a move to occur," said Matthew Speakman, a Zillow economist. "The May jobs report came in under expectations which, at least for now, weakened the likelihood that the Federal Reserve would tighten monetary policy anytime soon - something that would ultimately place more upward pressure on yields. But it's unlikely that the jobs report alone is responsible for this recent downward move.

"At a time when most other key economic indicators are revving at a high gear, a modest jobs report should have merely prevented a sharp upward move in rates, rather than stoking a meaningful downturn. Indeed, it appears that underlying market dynamics, and other factors such an increased foreign demand for U.S. Treasurys, are likely also helping to keep downward pressure on yields. The fact that rate movements don't appear to be tied to any specific data or developments makes it difficult to chart their path forward in the near term."

With inflation rising, the Federal Reserve may feel compelled to reduce its bond purchases and raise short-term interest rates. All eyes will be on next week's Fed meeting to see how central bank officials respond to the data.

"The Federal Reserve's monetary policy committee meets June 15 and 16, and it might mention the need to develop a timetable to restrict the Fed's easy-money ways," Holden Lewis, a home and mortgage specialist at NerdWallet, wrote in an email. "That would push mortgage rates higher. It's like when you're at a party and the host ostentatiously yawns: You know the party isn't yet over, but it will be soon. The Fed is stretching and getting ready to yawn. When it does, possibly next week, the low-rate party will gradually begin coming to a close."


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