One upside to the downturn in the U.S. stock market is a sharp drop in mortgage rates. Those rates follow the yield on the 10-year Treasury bond and on pricing in agency mortgage-backed securities; as investors rush to the comparative safety of the bond market, yields fall and so do rates.
It's not a perfect correlation, however, since there are other factors weighing on today's lenders, such as new regulations.
The average rate on the 30-year fixed conforming mortgage hit 4.34 percent Friday, down from 4.50 percent just a week earlier, according to Mortgage News Daily. Lenders haven't offered rates that low since November.
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"This correction is bigger than I would have expected," said Matthew Graham, COO of Mortgage News Daily, who points out that this week's jobs report could send rates right back in the other direction.