Mortgage rates fell for the fourth straight week, hitting their lowest level in two months.
The average interest rate on the standard 30-year fixed-rate mortgage fell to 6.28%, the lowest level since Feb. 9, according to a survey of lenders released Thursday by mortgage-financing giant Freddie Mac. Interest rates were at 6.32% a week ago and down from 5% a year ago.
Mortgage rates have fallen nearly half a percentage point since March 9, just before a series of bank failures raised concerns about the health of other small and medium-sized lenders. While the Federal Reserve has said it could ease its rate hikes sooner in response, the turmoil is expected to lead to tighter credit conditions as lenders pull back.
Requests to buy and refinance fell last week, according to the Mortgage Bankers Association.
While interest rates on conforming balance sheet loans fell last week, the MBA said, interest rates on jumbo mortgages ticked higher. Banks often carry jumbo loans on their bank balance sheets.
The divergence in interest rates “suggests that banks are reducing lending and preserving balance sheet capacity in response to recent challenges as deposits have contracted,” said Michael Fratantoni, chief economist at MBA.