After increasing for much of April interest rates on government-backed mortgages have been decreasing again for a several weeks and are now approaching new lows for the calendar year. Interest rates tend to track the 10 year treasury note so recent decreases in 10 year treasury yields have translated into 30 year mortgage rates below 5% in the last couple of weeks. Mortgage interest rates are volatile though so there is no telling how long this current dip will last.
Here is a quote from a recent WSJ article on this topic:
The average rate on the 30-year mortgage matched its lowest level since mid-January this week, according to Freddie Mac’s weekly survey released Thursday. …
“Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week,” said Frank Nothaft, vice president and chief economist at Freddie Mac, in a news release. “For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April.”
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