Americans may be losing money in their stock portfolios this week, but they are gaining purchasing power in the housing market. Mortgage rates are falling sharply, as investors head to the relative safe haven of the bond market.
Mortgage rates follow loosely the yield on the 10-year U.S. Treasury.
The average rate on the popular 30-year fixed has fallen 21 basis points in the past week, from 4.94 percent to 4.73 percent on Thursday, according to Mortgage News Daily. This rate is for borrowers with good credit and strong down payments. The drop comes after the 30-year fixed hit a recent eight-year high of 5.05 percent at the start of November.
"Lenders are going to vary a bit, both in general, and specifically with respect to recent volatility," said Matthew Graham, chief operating officer at Mortgage News Daily. "The important measurement is the change from the recent highs. In that regard, most lenders are roughly 3/8ths of a percentage point lower in rate than they were a month ago, which comes out to a savings of roughly $70 per month on a $300,000 loan."