The average interest rate on 30-year fixed-rate mortgages in the U.S. hit 3.36 percent Friday, matching the lowest level ever recorded.
The last time these mortgages came with a 3.36 percent interest rate was in December 2012. Driving the trend is a decline in the yield on 10-year U.S. Treasury bonds, which serve as a key benchmark for mortgages, Bloomberg reported.
The 10-year U.S. Treasury yield currently stands at 1.49 percent, down from 2.27 percent at the beginning of the year, as global investors seek safe investments amid economic uncertainty. Low treasury yields have also helped push up REIT stocks, as The Real Deal reported last week.
The Federal Reserve could raise short-term rates in September, but Sandler O’Neill analyst Alex Goldfarb told TRD last week that the impact on long-term treasury and mortgage rates would likely be limited.“Long-term rates are set by the market, and the Fed has only so much impact on the market,” he said. [Bloomberg] – Konrad Putzier