Published: Fri, May 19, 2017
Money | By Armando Alvarado

Mortgage Rates Take a Slight Drop


With a flurry of news breaking in Washington, mortgage rates moved to the downside with the benchmark 30-year fixed mortgage rate falling to a five-month low of 4.15 percent, according to Bankrate.com's weekly national survey. A year ago at this time, the 30-year FRM averaged 3.58 percent. Adjustable mortgage rates were on the decline as well, with the 5-year ARM sinking to 3.42 percent and the 7-year ARM reverting to where it had been two weeks ago at 3.62 percent.

The 30-year fixed rate averaged 4.02 percent, down three basis points from the prior week. It was 3.29 percent a week ago and 2.81 percent a year ago.

Mortgage rates will likely fall next week as 10-year Treasury yields have declined on safe-haven demand for bonds due to concerns about potential delays in tax cuts and other fiscal stimulus amid probes into U.S. President Donald Trump's 2016 campaign team and Russian Federation.

Mortgage rates fell slightly, but remained above the 4% mark, and are expected to see more substantial losses next week.

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Political uncertainty is causing anxious investors, who are pulling back from stocks and moving into bonds.

Amid growing worries that deepening political turmoil in Washington will hinder President Donald Trump's plans to enact tax cuts and other business-friendly policies, the stock market had its steepest drop since September on Wednesday.

Meanwhile, mortgage applications dwindled last week, according to the latest data from the Mortgage Bankers Association. The refinance index dropped 6 percent, while the purchase index tumbled 3 percent to its highest level since October 2015. This is down from last week's 4.05% but up from last year's 3.58%.

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