Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage dipped to 3.54 percent from 3.60 percent last week. That is well below its level a year ago of 4.00 percent.
The average rate on 15-year fixed-rate mortgages declined to 2.81 percent from 2.87 percent.
Deepening doubt about the strength of the U.S. economy and concern that Britons could vote to leave the European Union in a referendum next week are stoking the malaise.
Worries over a possible British exit from the 28-nation bloc helped depress the U.S. stock market for five straight days. Proponents of Britain remaining in the EU say a vote to leave could bring economic calamity to the country. It likely would roil global markets.
Bond prices have remained high, keeping yields low. Bond investors say the uncertainty about the expected close British vote has forced European investors to buy up U.S. government bonds in a search for security, pushing bond yields to their lowest levels in years.
Mortgage rates often move in sync with long-term bond yields. The yield on the benchmark 10-year Treasury note dropped to 1.57 percent Wednesday from 1.70 percent a week earlier. It fell further to 1.52 percent Thursday morning.
As expected, the Federal Reserve’s policymakers decided at their meeting this week to keep interest rates unchanged at 0.25 percent to 0.50 percent. In their announcement Wednesday, the Fed officials said that while U.S. economic activity continues to strengthen, “the pace of improvement in the labor market has slowed,” a reference to employment reports for April and May that were weaker than expected.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan also was steady at 0.5 point.
Rates on adjustable five-year mortgages averaged 2.74 percent this week, down from 2.82 percent last week. The fee remained at 0.5 percent.