Mortgage rates drop as 'high uncertainty' creates volatility

Mortgage rates drop to lowest level since April amid ‘high uncertainty’

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The 30-year fixed-rate mortgage averaged 4.99% as of August 4, according to data released by Freddie Mac on Thursday. That’s down 31 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%.

Rates have dipped below 5% for the first time since April.

The average rate on the 15-year fixed-rate mortgage fell 32 basis points over the past week to 4.26%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.25%, down 4 basis points from the prior week.

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” Sam Khater, chief economist at Freddie Mac, said in a statement.

He added that the “high uncertainty” around inflation and recession fears will “likely cause rates to remain variable,” particularly as the Federal Reserve weighs further moves to address the macroeconomic picture.

As of the second quarter of this year, there was $758 billion in newly originated mortgage loans, according to the New York Fed, with 65% of loans originated to borrowers with credit scores of over 760, which is considered very good.

The yield on the 10-year Treasury note

was trading above 2.7% in morning trading.

Got thoughts on the housing market? undefined

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