On Thursday April 7, the Federal Home Loan Mortgage Corp. released information that shows mortgage rates have hit lows not seen for over a year. This comes after a sharp decrease in the yields on benchmark ten-year Treasury bonds. These bonds dropped almost eleven basis points the previous week, the largest decline bonds have seen in two months. This drop was likely triggered by comments made by Janet Yellen, Federal Reserve Chair, when speaking to the Economics Club of New York. Yellen’s comments were cautious, indicating to many that now was not the time to take any major financial risks.
The average on a 30-year fixed mortgage dropped to 3.59 percent, down from 3.71 percent last week and 3.66 percent in 2015. This is the first time the rate for a 30-year fixed mortgage has reached this point since February 2015. Since the beginning of the year it has dropped a total of 42 basis points.
The 15-year fixed rate also dropping, hitting 2.88 percent, the lowest this type of mortgage has seen in almost three years. The prior week’s rate was 2.98 percent, while it sat at 2.93 percent in 2015. May 2013 was the last time the 15-year fixed rate was this low.
Due to these decreased rates, it comes as no surprise that mortgage applications and refinance applications increased as consumers raced to take advantage of the low rates.
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