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(Bloomberg) – In the United States, mortgage rates have gone down, allowing homebuyers to get the lowest credit costs in almost three years.
The average rate of a 30-year fixed mortgage was 3.49%, down from 3.58% last week and the lowest since October 2016, according to Freddie Mac data released Thursday. The average of the past 15 years has increased from 3.06% to 3%.
Mortgage rates have followed the decline in 10-year Treasury yields, as investors seek shelter amid growing fears that the recession is approaching. This creates opportunities for Americans who want to buy a house or reduce their monthly payments by refinancing a cheaper loan.
"While economic growth is clearly slowing due to mounting manufacturing and trade challenges, economic fundamentals remain strong for US consumers," said Sam Khater, chief economist at Freddie Mac, in a statement. "The unemployment rate is low, the affordability of housing is improving, the demand for homebuyers is increasing and house price growth is stable."
At the current average rate, the monthly payment on a $ 300,000 30-year loan would be $ 1,345. That's down from $ 1,527 a year ago when the rate was 4.54%.
While refinancing is booming, lower borrowing costs have not always driven buyers into the market. US homeowners' home purchase contracts fell 2.5% in July from June, a first drop after two months of gains, the National Association of Realtors said in the week last. Restricted stocks, particularly at the entry level, have discouraged some potential buyers.
To contact the reporter about this story: Prashant Gopal in Boston at [email protected]
To contact the makers of this story: Rob Urban at [email protected], Christine Maurus, Pierre Paulden
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