Mortgage rates for 30-year U.S. loans fell to the lowest level in three years as expectations for the Federal Reserve’s June meeting and Britain’s potential exit from the European Union drove investors to the safety of U.S. bonds.
The average rate for a 30-year fixed mortgage was 3.54 percent, down from from 3.6 percent last week and the lowest since May 2013, Freddie Mac said in a statement Thursday. The average 15-year rate slipped to 2.81 percent from 2.87 percent, according to the McLean, Virginia-based mortgage-finance company.
Mortgage rates are tracking a decline in yields for U.S. Treasuries as turbulent global markets increase competition for the benchmark securities. Federal Reserve policy makers held rates steady Wednesday and signaled that borrowing costs will remain low for some time.
“Wednesday’s Fed decision to once again stand pat on rates, as well as growing anticipation of the U.K.’s upcoming European Union referendum will make it difficult for Treasury yields and — more importantly — mortgage rates to substantially rise in the upcoming weeks,” Sean Becketti, chief economist for Freddie Mac, said in the statement.
The average rate for a 30-year mortgage has been below 4 percent since the beginning of the year. Its record low was 3.31 percent, in November 2012.