US mortgage rate drop could cause spike in home sales

Miami /
Apr.April 24, 2017 12:30 PM

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
Alex Sapir and Giovanni Fasciano with Arte by Antonio Citterio in Surfside (Photos via Arte by Antonio Citterio/PR Newswire)
Miami penthouse sets cryptocurrency sale record: $22.5M
Miami penthouse sets cryptocurrency sale record: $22.5M
(iStock)
South Florida resi construction starts soar in March
South Florida resi construction starts soar in March
Eden Multifamily heads Jay Massirman and Jay Jacobson with Cypress Equity Investments CEO Michael Sorochinsky (rendering courtesy of MSA Architects)
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
(iStock)
Home prices across globe hit records, prompting worries of bubble
Home prices across globe hit records, prompting worries of bubble
Steven and Beth Millner with One Thousand Ocean (Patrick McMullan/Getty, Google Maps)
Private equity honcho pays $5M for Boca Raton condo
Private equity honcho pays $5M for Boca Raton condo
Blink’s Michael Farkas and Lionstone’s Diego Lowenstein with 605 Lincoln Road (Google Maps)
Blink buys office condo on Miami Beach’s Lincoln Road for new HQ
Blink buys office condo on Miami Beach’s Lincoln Road for new HQ
From left: Jim Cohen, Nancy Corey, Nathan Zeder, Alicia Cervera Lamadrid, Phil Gutman and Mike Pappas (iStock)
South Florida’s pandemic-fueled residential market poised for bull run in 2021
South Florida’s pandemic-fueled residential market poised for bull run in 2021
Kathleen DuRoss Ford and 300 North Lake Way (Getty, Google Maps)
Kate Ford’s Palm Beach estate sells for $55M
Kate Ford’s Palm Beach estate sells for $55M
arrow_forward_ios

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

Loading...