Mortgage rates fell again this week (April 14th) and continue to trend downward, inching closer to historic lows. It is the third consecutive week in which home loans saw a decline, according to the latest survey by mortgage buyer Freddie Mac. However, the week-over-week change in home loans was minimal or “rangebound,” to use mortgage industry-speak.

The average rate for a 30-year fixed loan saw a minor change, moving slightly down from last week’s 3.43% to 3.41%. As it stands, loans are now just .1% away from the historic low reached in November, 3.31%, which was the lowest average for a 30-year fixed dating back to 1971.

The relatively static change can likely be attributed to continued stabilization of U.S. economic conditions. The bond market has especially benefited from uncertainty in the stock market, a relationship that will continue to have a dramatic effect on mortgage rates moving forward, according to mortgage expert Al Bowman:

“This leaves the stock markets to be the biggest influence on bond trading and changes to mortgage rates. If we see sizable stock gains, bonds will likely be pressured, leading to slightly higher mortgage rates. On the other hand, if the up and down pattern in stocks continues tomorrow, we are due to see the major stock indexes in negative territory. If that is the case, we should see a positive morning in bonds with a slight improvement to mortgage pricing.

The 30-year fixed wasn’t the only loan to see a slight dip. The average rate on a 15-year fixed mortgage also fell marginally, creeping slightly downward from last week’s 2.65% to 2.64%, which is now just a hair above (.01%) above the historic low.

Additionally, hybrid 5-year adjustable-rate mortgage went down from 2.62% from a week ago to 2.60%. The 1-year ARM, however, saw a slight increase week-over-week, moving up to 2.63% from last week’s 2.62%.

While some attribute the continued decline of interest rates to the bond and job markets, Frank E. Nothaft, Freddie Mac vice president and chief economist, points to weak consumer spending. “Retail sales contracted for the second time in three months, falling 0.4 percent in March,” Nothaft said in a statement. “In addition, the University of Michigan reported their Consumer Sentiment Index dropped 6.3 points in April to settle at 72.3, its lowest level since July. The April reading snapped a streak of three consecutive gains.”

Barring a surprise, rates are expected to remain consistent moving forward, presenting home buyers and people looking to refinance an opportunity to benefit from rates at near-historic levels.

Realtor.com