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Rates for home loans fell again, taking the benchmark product below a key threshold, as global economic concerns rocked markets.

The 30-year fixed-rate mortgage averaged 3.99% in the May 30 week, down from 4.06%, Freddie Mac said Thursday.[1] That marked a 16-month low for the popular product, which has eked out a weekly rise only six times so far in 2019.

The 15-year fixed-rate mortgage averaged 3.46%, down from 3.51%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.60%, down 8 basis points.

Rates have tumbled for the past few weeks, in line with the broader bond market, on concerns about a U.S.-China trade war and overall slowing global growth. When investors grow worried about future growth, fixed-income assets like bonds look more attractive, and when bond prices rise, yields fall. Fixed-rate mortgages follow the 10-year U.S. Treasury note TMUBMUSD10Y, -2.24%[2]  .

See: Sell your home with a Realtor or an algorithm? Maybe both.[3]

But Americans aren’t taking advantage of the rate lull the way they may have been expected to[4]. Mortgage applications for both purchases and refinances fell in the most recent week, the Mortgage Bankers Association said Wednesday.

“It is possible that the trade dispute[5] is causing potential homeowners to hold off on buying, with the fear that further escalation – or the lack of resolution – may have adverse impacts on the economy and housing market,” the...

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