U.S. mortgage rates dropped for a fifth week, sending home-loan costs down to their lowest point since the week after the presidential election.
The average rate for a 30-year fixed mortgage was 3.97 percent, down from 4.08 percent last week and the lowest since November, Freddie Mac said in a statement Thursday. The average 15-year rate decreased to 3.23 percent from 3.34 percent, the McLean, Virginia-based mortgage-finance company said.
Yields for the Treasuries that guide mortgage costs have dropped on investor expectations that an economy won’t be as robust as anticipated, according to Guy Cecala, publisher of the newsletter Inside Mortgage Finance.
“The real factor has been the stock market and investor perception of how the U.S. economy is doing,” he said. “After we saw health-care reform efforts fail, the stock market reacted and investors started rethinking what was doable under a Trump administration.”
The decrease in mortgage rates may encourage homeowners to refinance in the short term as buyers take advantage of lower borrowing costs. An improving job market is increasing demand for real estate as supply of homes for sale tightens. Listings of existing homes for sale are scarcer than they’ve ever been, and bidding wars are becoming more common again.