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Mortgage Rates Fall Again As The Peak Home-Buying Season Begins To Draw To A Close

Mortgage rates slipped lower over the last week, a boon to those looking to buy a home or refinance.

The 30-year fixed-rate mortgage averaged 3.55% during the week ending Aug. 22, down five basis points from the previous week, Freddie Mac FMCC, +10.00% reported Thursday.

Rates for 30-year home loans have only increased eight times on a weekly basis so far this year — otherwise, they have dropped or remained even.

The 15-year fixed-rate mortgage dropped four basis points to an average of 3.03%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.32%, falling three basis point.

Mortgage rates track the 10-year Treasury note TMUBMUSD10Y, +1.18%. Last week, the yields of the 10-year note and the 2-year Treasury note TMUBMUSD02Y, +2.33% inverted for the first time in over a decade, meaning the shorter-term note’s yield was higher. Yield curve inversions have historically signalled that the U.S. economy could face a recession.

Looking ahead, it’s unclear whether mortgage rates will fall again or increase. Federal Reserve officials appear to view the rate cut last month as a “recalibration” and not necessarily as the first of multiple cuts, according to the minutes of their most recent meeting released Wednesday.

When the Federal Reserve cuts rates, that directly affects short-term interest rates rather than long-term rates like those for the 30-year mortgage. Nevertheless, the mortgage market tends to bake in expectations of future Fed moves into the rates offered, which explains why mortgage rates were falling well before the Fed took action.


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