US long-term mortgage rates remained near historically low levels this week against a backdrop of volatile financial markets around the globe.
Mortgage buyer Freddie Mac said Thursday the average rate on the benchmark 30-year loan was unchanged at 3.60 per cent, its lowest level since November 2016. A year ago the rate stood at 4.53 per cent.
The average mortgage rate for 15-year, fixed-rate home loans edged up to 3.07 per cent from 3.05 per cent last week.
Continued anxiety over the US-China trade war and slowing global economic growth made for a rocky ride in the markets.
On Wednesday, US stocks plunged after the bond market sent out a fairly reliable warning signal of recession.
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The whipsawed markets have sent investors fleeing from stocks to the safety of bonds, pushing bond interest rates to record lows.
The yield on the key 10-year US Treasury note which influences long-term mortgage rates briefly fell Wednesday below the yield on the 2-year Treasury for the first time since 2007.
That inverted yield curve suggests that bond investors expect growth to slow so much that the Federal Reserve will soon feel compelled to slash short-term rates to try to support the economy.
As a sign of economic pessimism, the inversion sent US stocks tumbling Wednesday, with the Dow Jones Industrial Average diving 800 points, or 3 per cent.
The climate of low home borrowing rates has sparked a flurry of activity by prospective homebuyers as well as owners looking to refinance mortgages.
Mortgage applications for home purchases increased 2 per cent in the week ended August 9 from a week earlier, the Mortgage Bankers Association reported.
Refinance applications jumped 37 per cent to a three-year high.
Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.
The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates.
The average fee on 30-year fixed-rate mortgages fell this week to 0.5 point from 0.6 point.
The average fee for the 15-year mortgage was unchanged at 0.5 point.
The average rate for five-year adjustable-rate mortgages slipped to 3.35 per cent from 3.36 per cent last week. The fee remained at 0.3 point.
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