The geopolitical stage has had some tense moments the past month, from the conflict with Iran to the trade deal with China. And these nail-biting developments have taken the U.S. mortgage rates on a rollercoaster ride. After a dip the week before due to growing tensions between the U.S. and Iran, mortgage rates rose slightly as the United States and China signed the first phase of their trade deal. Economists expect this up-and-down to continue as the nation navigates its foreign affairs, and they say that this may benefit homebuyers, as uncertainty may push the mortgage rates lower in the long run despite the higher rate seen last week.
Mortgage rates edged up slightly over the last week amid continued uncertainty about the state of global affairs.
The 30-year fixed-rate mortgage averaged 3.65% during the week ending Jan. 16, up a single basis point from the previous week when rates dropped amid growing tensions between the U.S. and Iran, Freddie Mac FMCC, -1.67% reported Thursday.
The 15-year fixed-rate mortgage increased two basis points to an average of 3.09%, according to Freddie Mac. The 5-year Treasury-indexed hybrid adjustable mortgage averaged 3.39%, rising nine basis points from a week ago.
The direction of mortgage rates tends to reflect movement in the 10-year Treasury yield. Before this past week, investors had rushed to purchase Treasury notes as a precautionary measure when it looked likely that a conflict could emerge between the U.S. and Iran. As a result, the yield on these notes fell, causing mortgage rates to drop to their lowest levels in a month.