By Jo Constantz
Mortgage rates in the U.S. slid as global markets churn over Russia’s invasion of Ukraine.
The average for a 30-year loan was 3.76%, down from 3.89% last week, Freddie Mac said in a statement March 3.
It was the second straight decline for rates, tracking yields for 10-year Treasuries, which slipped this week to the lowest since January. The war in Ukraine has roiled financial markets and set off a flight to safe assets such as U.S. government bonds.
The drop gives would-be homebuyers hope of a reprieve after weeks of watching mortgage rates climb dramatically. The double whammy of rising borrowing costs and escalating home prices has shut many Americans out of the market for purchases.
A rapid increase in rates over the past six months has slowed the mortgage business. Loan originations in the fourth quarter were down 13% from a year earlier, driven by a plunge in refinancing, according to Attom Data Solutions.
The volatility in global markets is expected to keep rates down for the short term, according to Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association. He said borrowing costs will likely increase later in the year, given persistent inflation and the Federal Reserve’s planned benchmark rate hikes, though it’s impossible to predict what course the war will take and the impact it will have.
“We don’t know how long the conflict is going to last,” Kan said. “It’s added more volatility to what was already uncertain time for markets.”
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