Here's something we haven't seen since January of last year: Mortgage rates below 4%, on average!
They've reached that attention-grabbing level after falling for the last five weeks in a row. One reason for the steady decline is the trade battle with China. Though it has squeezed some U.S. farmers and manufacturers, the tariff tussle has helped to push mortgage rates down.
If you're in the market for a mortgage and see a rate you like, don't let it get away. Explore whether you should lock in a low rate now.
This week's numbers
The average rate on 30-year fixed-rate mortgages has skidded to 3.99%, from 4.06% last week, says mortgage giant Freddie Mac.
The loans in the survey come with an average 0.5 point.
Homebuyers are getting quite a bargain compared to last year at this time, when the benchmark rate was averaging 4.56%. The monthly payment on a 30-year fixed-rate mortgage at 3.99% is about $954, versus $1,013 at 4.56%.
But the drop in rates still isn't sinking in with borrowers, because mortgage applications fell 3.3% last week, reports the Mortgage Bankers Association.
Applications for loans to buy homes dipped 1%, while refinancings went down 6%.
Homeowners shouldn't miss out on a chance to refi at a lower rate. Compare mortgage offers from multiple banks by visiting LendingTree.
Why rates are doing what they're doing
Mortgage rates have tagged along this week as interest rates on long-term Treasury bonds have taken a big dive. That's happened as traders have felt more hopeless about the U.S. trade war with China, says Sam Khater, Freddie Mac's chief economist.
"Lower rates should, however, give a boost to the housing market," he points out.
Home sales have remained weak, largely due to a scarcity of lower-priced houses. The National Association of Realtors has reported that sales of existing homes in April slipped 0.4% from March, and were down 4.4% compared to April 2018.
Buyers who can find something in their price range are likely to find lower mortgage rates throughout 2019.
The Federal Reserve has indicated it's not inclined to raise rates anytime soon, and Freddie Mac is currently forecasting that the year's average rate on 30-year home loans will be 4.3%, down from 4.6% last year.
If you're wanting to buy a home this year, calculate what your monthly mortgage payment would be.
This week's other mortgage rates
Average rates on 15-year mortgages have dropped this week from 3.51% to 3.46%, another new 2019 low. Last year at this time, rates on those shorter-term home loans were averaging 4.06%, Freddie Mac says.
Meanwhile, 5/1 adjustable-rate mortgages — featuring rates that hold steady for five years and then can "adjust" up (or down) every year — are looking more attractive, too.
They're being offered at initial rates averaging 3.60%, down from 3.68% last week. A year ago, starter rates on those ARMs were averaging 3.80%.
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