Mortgage rates in the U.S. fell, with the 15-year average hitting a record low, as weak job growth and concern about Europe’s debt crisis drove investors to the safety of the Treasuries that guide home loans.
The average rate for a 30-year mortgage declined to 3.88 percent in the week ended today from 3.98 percent, Freddie Mac said in a statement. The rate was 3.87 percent in February, the lowest in Freddie Mac data dating to 1971. The average 15-year rate dropped to 3.11 percent from 3.21 percent. The previous low was 3.13 last month, according to the McLean, Virginia-based mortgage-finance company.
The 10-year Treasury yield, a benchmark for mortgages, fell below 2 percent for the first time in almost a month on April 10 as yields on Spanish and Italian bonds increased. The U.S. Labor Department said April 6 that employers added 120,000 jobs in March, the fewest in five months and less than the most pessimistic estimate in a Bloomberg News survey of economists.
“There was a tempering of optimism,” said Keith Gumbinger, vice president of HSH Associates, a mortgage-data firm in Pompton Plains, New Jersey. “The market was getting a little ahead of itself about where the economy was domestically and globally.”
Home-loan applications in the U.S. dropped for the eighth week in the last nine as fewer homes were refinanced. The Mortgage Bankers Association’s index decreased 2.4 percent in the period ended April 6, the Washington-based group reported yesterday.