"Rates are expected to stay low in the short-term but will likely increase in the coming months"
A week into Russia’s invasion of Ukraine, US mortgage rates fell further amid heightened market uncertainty and geopolitical tensions.
The 30-year fixed-rate mortgage retreated from 3.89% last week to 3.76% for the week ending March 3, mortgage buyer Freddie Mac said Thursday. The popular long-term rate hit a nearly three-year high of 3.92% on Feb.17 before dropping to 3.89% the following week. A year ago, it averaged 3.02%.
Freddie Mac chief economist Sam Khater said the decline resulted from Treasury yields receding as investors moved to the safety of bonds.
Read more: How will the Russia-Ukraine conflict affect the housing sector?
“While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty,” Khater explained. “Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.”
The 15-year fixed-rate mortgage declined to 3.01%, down 13 basis points week over week but was higher than last year’s average of 2.34%. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) posted a seven-basis-point drop week over week to 2.91%. A year ago at this time, the average five-year ARM was 2.73%.
