Mortgage rates drop amid Russian-Ukrainian war
Mortgage interest rates have fallen over the past week, pushed lower by the economic reaction to the Russian invasion of Ukraine, according to the latest data by Freddie Mac.
The average 30-year fixed-rate mortgage fell to 3.76% for the week ending March 3, according to Freddie Mac’s Primary Mortgage Market Survey. That’s down from 3.89% last week – a drop of 13 basis points – but up from 3.02% last year.
“Geopolitical tensions pushed US Treasury yields lower this week as investors turned to bond safety, driving mortgage rates lower,” said Freddie Mac chief economist Sam Khater. “While inflationary pressures persist, the cascading effects of the war in Ukraine have created market uncertainty. As a result, rates are expected to remain low in the near term but will likely rise in the coming months.”
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Investors worried about geopolitical conflict and rising oil prices
Mortgage rates for other types of loans have also fallen this week as investors weigh on the Russian-Ukrainian conflict and rising oil prices. The 15-year mortgage rate fell to 3.01% from 3.14% Last week but up from 2.34% last year. The five-year Treasury-indexed hybrid variable-rate (ARM) mortgage fell to 2.91% from 2.98% last week, but up from 2.73% last year.
“The Freddie Mac fixed rate for a 30-year loan continued its retreat, falling 13 basis points to 3.76% this week, following the sharp drop in the 10-year Treasury earlier in the week,” said George Ratiu, Realtor.com. director of economic research, said. “Investors are worried about the worsening Russian-Ukrainian conflict and rising oil prices, and wary of the fallout from increased economic sanctions.”
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Fed on track to hike rates in March
Despite these lower interest rates, the Federal Reserve is always expected raise the federal funds rate in March to control rising inflation.
“Markets have their eyes on rising inflation and expect the Federal Reserve to hike 25 basis points at its next meeting in mid-March,” Ratiu said. “Market volatility and rising oil prices are likely to push bond yields toward larger swings, while inflation will keep upward pressure on mortgage rates.”
To determine if a mortgage refinance is the right financial decision for you, you can contact Credible to speak to a mortgage expert and get all your questions answered.
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