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US long-term mortgage rates fall sharply

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WASHINGTON (AP) — US long-term mortgage rates dropped this week, with the benchmark 30-year loan touching its lowest level since November 2016.

Financial markets around the globe have been whipsawed by anxiety over the US-China trade war, sending investors fleeing from stocks to the safety of bonds and pushing bond interest-rates to record lows.

Mortgage buyer Freddie Mac says the average rate on the 30-year mortgage dropped to 3.6 percent from 3.75 percent last week. A year ago the rate stood at 4.59 percent.

The average rate for 15-year fixed-rate home loans tumbled to 3.05 percent from 3.20 percent.

Last week, the Federal Reserve cut in its benchmark interest rate for the first time in a decade. The Fed made the quarter-point rate reduction with the aim of countering the impact of Trump’s trade wars, stubbornly low inflation, and global economic weakness. The risk of a recession in the United States remains relatively low.

Fed Chairman Jerome Powell left open the possibility of future rate cuts, but perhaps not as many as Wall Street had been hoped for. The Fed’s rate cut unwound some of the credit tightening from last year, when rates were raised four times.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.
The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.6 point. The average fee for the 15-year mortgage also was steady, at 0.5 point.
The average rate for five-year adjustable-rate mortgages fell to 3.36 percent from 3.46 percent last week. The fee slipped to 0.3 point from 0.4 point.

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