The mortgage market had one of its most significant quarters since the financial crisis as falling rates prompted a flurry of refinancing and an uptick in purchases.
The 30-year mortgage rate unexpectedly dropped to below 4% in May and has remained near its lowest level in three years, opening a window for borrowers who bought at higher rates to lower their payments and for purchasers to jump in.
With the Federal Reserve expected to lower short-term rates this week and the yield on the longer-term 10-year Treasury yield lingering just above 2%, the period of low rates stands to continue.
Falling rates are welcome news for lenders, but they mask a housing market that by some measures is cooling and remains vulnerable to a sudden updraft in rates. What’s more, home prices have continued to rise at a faster pace than median incomes, putting home ownership out of reach for more Americans.