9:50 am CDT, Thursday, May 16, 2019
Photo: Houston Association Of Realtors
Mortgage rates experienced the largest year-over-year decline since the 2016 Brexit vote sparked market concerns, according to Freddie Mac’s most recent weekly survey.
The interest rate on a 30-year fixed-rate mortgage fell to 4.07 percent from 4.61 a year before, according to Freddie Mac. The rate is 13 basis points below what it was two weeks ago, before a seemingly near trade agreement with China dissolved into escalating tariffs. In its analysis, Freddie Mac noted that weakening consumer spending and manufacturing data may have also contributed to falling rates.
Economic uncertainty can lead to falling mortgage rates, and economists took note of the recent decline, tied to the escalating trade war between the U.S. and China.
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“Mortgage rates declined this week following the administration’s announcement of tariff increases,” said George Raitu, an economist for the National Association of Realtors, in an emailed statement. “Even as investors found hope in the President’s tweets about the possibility of reaching a trade deal, long-term bond rates indicated a preference for safety.”
The mortgage finance company nevertheless maintained a positive outlook.
“While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates, which will drive up home sale this summer,” Freddie Mac wrote in its report.