Mortgage rates were expected to rise this year, but have tumbled instead reports Washington Post writer Kathy Orton. The 30-year fixed-rate average sank to a three-year low according to the Federal Home Loan Mortgage Corp., hitting 3.54% last week, down from 3.6% the week before and 4% this time last year.
According to the latest weekly mortgage-rate-trend index from Bankrate.com, no experts surveyed think that rates will go up and more than half expect them to fall further.
The last time rates were this favorable was May 2013, right before former Federal Reserve chairman Ben Bernanke testified before Congress about slowing the Fed’s bond purchases. The resulting “taper tantrum” sent rates soaring.
Meanwhile, even though rates moved lower, mortgage applications slumped this week, according to the latest data from the Mortgage Bankers Association. “Conventional refinance application activity picked up slightly due to the rate drop, but purchase activity dropped sufficiently to cause an overall drop in mortgage application volume for the week,” Mike Fratantoni, MBA chief economist, said. “However, purchase activity remains sixteen percent above the same time last year, consistent with year-to-date trends.”