Treasury Bond Yields lower this week – The 10-year treasury bond closed the week yielding 2.87%, down from 2.96% last week. The 30-year treasury bond yield ended the week at 3.03%, down from 3.09% last week. Mortgage rates follow bond yields. I’d expect next weeks mortgage rates to be slightly lower.
Mortgage rates almost unchanged for the week – The August 9, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.59%, almost unchanged from 4.60% last week. The 15-year fixed was 4.05%, almost unchanged from 4.08% last week. The 5-year ARM was 3.90%, down slightly from 3.93% last week.
Housing affordability drops to a 10-year low in the second quarter – The California Association of Realtors reported that only 26% of California households could afford to purchase a median priced home in California. That was down sharply from 31% in the first quarter of 2018. It was also down from 29% in the second quarter of 2017. Rising home prices, higher interest rates, and stagnant incomes have driven affordability down. For example, home prices in June rose over 8%, while wages grew just 2.7% from one year earlier. Interest rates were no higher in the second quarter of 2018 than in the first quarter, but were higher than in the second quarter of 2017.