Investors pile into bonds as bond prices rise and push yields down
Mortgage rates plunged last week as investors continued to prepare for slowing economic growth, according to Freddie Mac’s latest weekly data report.
The 30-year fixed-rate mortgage averaged 4.28% last week, down three basis points, said Freddie Mac on Thursday. The 30-year FMM hit 13-month low, and has seen a weekly gain only twice during 2019.
The 15-year fixed-rate mortgage averaged 3.71%, down from 3.76%. Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage remained unchanged at 3.85% during the week.
Bond purchases were heavy leading up to the Fed’s interest-rate decision last week, with investors anticipating a more dovish stance from the central bank. It turned out to be a good call, as the increase in bond prices will likely reflect in mortgage rates this week.
But the economy hasn’t slowed enough that unemployment is rising, according to an article in MarketWatch. The Mortgage Bankers Association said that Americans are still showing signs that they want to buy homes, as mortgage applications climbed 1.6% over the previous week when rates dropped.
