As fears over economic slowdown loom, mortgage rates drop in US

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As fears over economic slowdown loom, mortgage rates drop in US

According to an ABC report, mortgage rates have dropped in the United States this week. The drop in rates have coincided with people seeking to buy treasury notes. Quoting statistics, Freddic Mac said that as compared to the previous week's rates of around 4.63%, this week, the mortgage rate – especially for the long-term, fixed mortgage plan of 30 years – was lower at 4.62%.

In comparison, according to Mac, in 2017, the 30-year fixed mortgage rates were hovering slightly below 4%, at 3.94%. The 15-year fixed mortgage plans were, however, constant at slightly above 4% (at 4.07%). As compared to 2017's statistics of 3.38% rates, this is a substantial increase.

One reason said to be for the drop in the mortgage rates is that prospective house owners are worried that an economic slowdown is on the cards in the US, which has led them to purchase treasury notes. An upside of the mortgage rates dropping now is that house rates will become more affordable.

During the days when the mortgage rates were high, house sales had also been trimmed. According to Freddie Mac's chief economist Sam Khater, "Given the further drop in rates we've seen this month, we expect to see a modest rebound in home sales as well."

According to ABC, the purchase of the Treasury Notes has led to a decrease in the interest rates offered from 3% to 2.8%. The mortgage rates, too, depend on the interest charged by US government on its debt.