Mortgage rates reversed course this week, falling for the first time in three weeks, according to the latest data released Thursday by the Federal Home Loan Mortgage Corp.
Global economic concerns — chiefly the United Kingdom’s referendum later this month on whether to remain part of the European Union, or Brexit, as it is commonly known — are also fueling investor worries. Those fears are driving down Treasury yields. After Wednesday’s auction, the 10-year note dipped to its lowest level in two months.
Home-loan rates, which are closely linked to long-term bonds, retreated as well.
The 15-year fixed-rate average fell to 2.87 percent with an average 0.5 point. It was 2.92 percent a week ago and 3.25 percent a year ago.
The five-year adjustable rate average sank to 2.82 percent with an average 0.5 point. It was 2.88 percent a week ago and 3.01 percent a year ago.
“Growing optimism about the state of the economy was quickly erased with May’s employment report,” Sean Becketti, Freddie Mac chief economist, said in a statement.
“The disappointing release caused an immediate flight to quality resulting in the 10-year Treasury yield dropping 10 basis points on Friday,” he said. “The 30-year fixed-rate mortgage responded by falling six basis points to 3.60 percent. This week marks the 10th consecutive week the 30-year rate has averaged under 3.7 percent, allowing an extended window for home buyers to take advantage of these historically low borrowing costs.”
The drop in rates helped spur mortgage applications this week, according to the latest data from the Mortgage Bankers Association.
The market composite index — a measure of total loan application volume — grew 9.3 percent from the previous week. The refinance index climbed 7 percent, while the purchase index jumped 12 percent.
The refinance share of mortgage activity accounted for 53.8 percent of all applications.
