US mortgage rate drop could cause spike in home sales

Los Angeles /
Apr.April 24, 2017 10:30 AM

From TRD New York: U.S. mortgage rates fell below 4 percent last week, which may encourage a rush of home buyers.

Last week, the average rate on a 30-year fixed-rate mortgage was 3.9 percent, the Wall Street Journal reported, citing data released by Freddie Mac. It’s the first time rates have dropped below 4 percent since November. A week earlier, the rate was 4.08 percent and in mid-March it was 4.3 percent, according to the Journal.

Mortgage rates jumped following Donald Trump’s presidential win, after hovering slightly above 3.5 percent for the 30-year fixed-rate mortgage for most of 2016. The Federal Reserve raised interest rates last month, and officials have foreshadowed two more rate raises this year.

However, Treasury yields came close to a five-month low last week, driven by investor concerns about unrest in Syria and North Korea, and because of little development on tax reform.

Economists say a mortgage rate decline could drive more home buyers towards investing, as lower rates mean reduced mortgage repayments.

“Almost the entirety of the Trump bump [to mortgage rates] has been washed away,” Keith Gumbinger, a vice president at HSH.com, a mortgage-information website, told the newspaper.

“It’s driving more demand into a market that doesn’t have much in the way of supply,” he added. [WSJ]Miriam Hall


Related Articles

arrow_forward_ios
Renderings of the Little Tokyo Service Center (KoningEizenberg) 
$275M approved for LA affordable housing projects
$275M approved for LA affordable housing projects
Josh Zegen and rendering of 21555 Oxnard Street (iStock, Google Maps)
Madison Realty Capital provides $34M loan-on-loan for Warner Center redevelopment
Madison Realty Capital provides $34M loan-on-loan for Warner Center redevelopment
Brookfield CEO Brian Kingston and 725 South Figueroa Street (Google Maps)
Brookfield lands $305M refi for Ernst & Young Plaza in DTLA
Brookfield lands $305M refi for Ernst & Young Plaza in DTLA
Interest rate drops spur loan requests from multifamily borrowers (Credit: iStock)
Multifamily owners rush to refinance their mortgages
Multifamily owners rush to refinance their mortgages
Best of TRD 2019 promo
Coming soon: The Real Deal’s Best of 2019
Coming soon: The Real Deal’s Best of 2019
2201 Rosecrans Ave in El Segundo
Continental snags $55M refi on El Segundo office portfolio
Continental snags $55M refi on El Segundo office portfolio
From left: Gavin Newsom and David Chiu (Credit: Getty Images and iStock)
Will rent control dent the multifamily market? Lenders, investors weigh in
Will rent control dent the multifamily market? Lenders, investors weigh in
East LA Community Corporation President Isela Gracian, CIT Bank President Robert Rubino and the two projects
East LA Community Corp. lands $55M in loans for affordable housing projects
East LA Community Corp. lands $55M in loans for affordable housing projects
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...