Home Breaking News Mortgage rates plunge below 4% as investors flee the ‘Trump trade’

Mortgage rates plunge below 4% as investors flee the ‘Trump trade’


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It’s not mortgage rates that will be holding down affordability this year.

Rates for home loans lurched lower, sending the benchmark below the key 4% threshold for the first time in six months, Freddie Mac said Thursday.

The 30-year fixed-rate mortgage averaged 3.97%, down 11 basis points during the week and below 4% for the first time since Nov. 17. The 15-year fixed-rate mortgage averaged 3.23%, down from 3.34%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.10%, compared to 3.18% last week.

Those rates don’t include fees associated with obtaining mortgage loans.

The 10-year Treasury note

TMUBMUSD10Y, +1.08%

  declined only slightly during the week, but many analysts are expecting it to fall further.

Investors sold bonds in the aftermath of the presidential election believing riskier assets held greater opportunity, and that higher inflation would erode the value of fixed-income investments.

Now, the promises of stronger economic growth, fiscal stimulus and tax reform all seem unlikely, and investors are reversing the “Trump trade.”

Also read: The market is beginning to price in the death of Trump’s tax reform

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