The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.82 percent from 3.87 percent, with points decreasing to 0.34 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio loans, according to the MBA.
Rates moved even lower at the start of this week, hitting their lowest level in three years, according to Mortgage News Daily. Rates stayed low despite some strength in the stock market, which usually pushes bond yields down; mortgage rates loosely follow the yield on the 10-year Treasury. Three years ago, when the Federal Reserve hinted it would begin to "taper" its investments in mortgage-backed bonds, rates moved decidedly higher quickly.
"Despite expectations that rates would slowly rise this year, the 30-year fixed rate last week was 18 basis points lower than a year ago, continuing to provide a favorable rate environment for the housing market," said Lynn Fisher, MBA vice president of research and economics.