Mortgage Rates Fall to Three-Month Low: MBA

In the last week of February, mortgage rates fell to the lowest levels in nearly three months.

The average contract rate on a 30-year mortgage slipped 15 basis points to 6.73 percent in the final week of last month, according to the Mortgage Bankers Association’s weekly survey reported by Bloomberg.

In addition to hovering near a three-month low, declines in the average contract rate were the largest for a single week since November. Mortgage rates fell in tandem with Treasury yields, which fell in the previous week after a stock market selloff.

Buyers pounced on the rate decline, meeting the moment as housing affordability remains troubling for many. The home purchase application index jumped by more than 9 percent, according to the MBA. That’s nothing compared to the whopping 37 percent rise in refinancing applications, which hit the highest levels since October.

National Association of Realtors chief economist Lawrence Yun recently suggested that “even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices.”

Buyers and refinancers may have also been attempting to take advantage of a window that closed this week before more potential economic upheaval.

Economists have long forecasted that President Donald Trump’s tariff and tax cut policies could spark a rise in mortgage rates as his proposals create a risk of renewed inflation. Trump already levied significant tariffs on Mexico and Canada, only to pause implementation after receiving concessions related to border security.

But that 30-day pause came to an end as Monday turned into Tuesday and the tariffs went into effect. They immediately drew retaliatory measures and threats of retaliation from Canada and Mexico, which could escalate a trade war likely to have an impact on everyday items in the United States.

— Holden Walter-Warner