Rates for home loans slid for the third straight week as investors flocked to the safety of the bond market.
The 30-year fixed-rate mortgage averaged 4.52% during the July 5 week, down from 4.55%, mortgage provider Freddie Mac said Thursday. The 15-year fixed-rate mortgage averaged 3.99%, down five basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.74%, down from 3.87%.
Those rates don’t include fees associated with obtaining mortgage loans.
After a fierce sell-off in the wake of the December tax cuts, bonds have become more attractive as investors remain concerned about unsettled geopolitics and the prospect of a global trade war. Mortgage rates track along the 10-year U.S. Treasury note.
Bond yields fall as prices rise.
That turmoil is offering a small lifeline to mortgage borrowers. The benchmark 30-year fixed-rate mortgage has declined in five of the past six weeks and now stands at its lowest since mid-April.
Meanwhile, ferocious demand keeps pushing home prices higher. On Tuesday, real estate data provider CoreLogic said that its nationwide home price index was 7.1% higher than a year ago in May.
Far from moderating, as most analysts have anticipated, prices are accelerating. Over the past 12 months, CoreLogic’s home price index has decelerated just once. Put another way, at this time last year, home prices were rising at a 5.8% annual pace.
CoreLogic conducted a consumer survey alongside its pricing report which clearly showed the challenges facing the housing market. Nationally,15% of homeowners and 28% of renters have indicated a desire to buy a home in the next 12 months, the survey found, while only 11% have indicated a desire to sell.