Mortgage rates are pulled down by global events
Mortgage rates have been in a tug of war lately. Inflation was pulling them higher, but now Russia's attack on Ukraine is dragging them back down.
According to data released Thursday by Freddie Mac, the 30-year fixed-rate average fell for the second week in a row, slipping to 3.76% with an average 0.8 point. (A point is a fee paid to a lender equal to 1% of the loan amount. It is in addition to the interest rate.) It was 3.89% a week ago and 3.02% a year ago.
Freddie Mac, the federally chartered mortgage investor, aggregates rates from some 80 lenders across the country to come up with weekly national averages. The survey is based on home purchase mortgages. Rates for refinances may be different. It uses rates for high-quality borrowers with strong credit scores who make large down payments. Because of the criteria, these rates are not available to every borrower.
The 15-year fixed-rate average dropped to 3.01% with an average 0.8 point. It was 3.14% a week ago and 2.34% a year ago. The five-year adjustable rate average slid to 2.91% with an average 0.3 point. It was 2.98% a week ago and 2.73% a year ago.
"Mortgage rates fell this week as investors sought safety by buying mortgage bonds," said Holden Lewis, a home and mortgage specialist at NerdWallet. "This decline in rates is temporary because the Federal Reserve will start its rate-raising campaign in earnest in the middle of the month."
Since the beginning of the year, mortgage rates had been trending higher. They had climbed 70 basis points before global events intervened. (A basis point is 0.01 of a percentage point.)
"Mortgage rates have generally risen over the past few months, but have been volatile for some time, and the conflict in Ukraine has exacerbated the volatility further," Robert Heck, the vice president for mortgage at Morty, an online mortgage...
