The 9.0 earthquake and subsequent tsunami that devastated Japan last week sent a ripple through the U.S. mortgage markets causing interest rates to lower this week.
"With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well,” says Frank Nothaft, Freddie Mac’s chief economist. “This allowed fixed mortgage rates to drift lower this week.”
The 15-year fixed-rate mortgage dropped below 4 percent this week, reaching its lowest level since December 2010. The 15-year mortgage rate averaged 3.97 percent this week, compared to last week’s 4.15 percent, according to Freddie Mac’s weekly mortgage rate survey.
The 30-year fixed-rate mortgage also dropped this week, averaging 4.76 percent compared to last week’s 4.88 percent. Last year at this time, 30-year mortgages averaged 4.96 percent.
The 5-year adjustable-rate mortgage also inched downward, averaging 3.57 percent compared to last week’s 3.73 percent.
Source: “30-Year Fixed-Rate Mortgage Drops Amid Japan Crisis,” Freddie Mac (March 17, 2011)
