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Brexit drives mortgage rates to near-record lows

The average rate on a 30-year fixed-rate mortgage fell to the lowest rate in three years following the Brexit vote. (AP Photo/Pablo Martinez Monsivais, File)

WASHINGTON — U.S. Treasury yields fell sharply after the British referendum vote to leave the European Union, and mortgage rates followed suit.

Freddie Mac says the average rate on a 30-year fixed-rate mortgage for borrowers with excellent credit fell to 3.48 percent this week, the lowest in three years, and just 17 basis points higher than the all-time low for 30-year rates set in late-2012.

The average rate on a 15-year fix fell to 2.78 percent this week.

“In the wake of the Brexit vote, the yield on the 10-year U.S. Treasury bond plummeted 24 basis points,” said Freddie Mac chief economist Sean Becketti. “This extremely low mortgage rate should support solid home sales and refinancing volume this summer,” he said.

Despite low rates last month, and now even lower rates looking ahead, there was a surprise slowdown in housing sales in May.

The National Association of Realtors says pending sales of existing homes—those are contracts signed to buy but sales not yet closed—fell 3.7 percent in May.

The 30-year mortgage rates have remained below 4 percent since the beginning of the year. The all-time low for a 30-year rate was just 3.31 percent, in November 2012.

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