Mortgage rates recorded their largest decline since 2008

WASHINGTON–Mortgage rates recorded their largest decline since 2008 last week, according to new data from Freddie Mac.

The decline comes as investors increasingly believe the economy is headed for a downturn, according to analysts.

Freddie Mac reported the average rate on a 30-year fixed-rate mortgage fell to 5.30%,  down from 5.70% one week earlier. It is the largest weekly decline since December 2008, when the rate fell from 5.97% to 5.53%, according to Freddie.

‘Growing Fears’

“Growing fears of a recession in the U.S. stand to further push down mortgage rates as investors pile into U.S. Treasuries, widely seen as safe investments during times of economic uncertainty,” noted the Wall Street Journal. “Mortgage rates are closely tied to yields on the benchmark 10-year U.S. Treasury, which fell to their lowest level in more than a month this week. Yields fall when prices rise.”

Meanwhile, the Federal Reserve Bank of Atlanta reported that monthly mortgage payments remain at the least affordable level in years. The typical U.S. household will spend an additional $400 on its mortgage payment each month than it would have in January, according to the bank.

The Atlanta Fed added that in April, the typical American household would have needed 41.2% of its income to cover monthly mortgage payments.