Mortgage Rates Drop As U.S. Bank Failures Compress Bond Yields

Two U.S. bank failures sent Wall Street investors scurrying for the perceived safety of the bonds markets this week, providing the real estate industry with an unexpected boon on the brink of its busiest season: the lowest mortgage rates in three weeks.

The average U.S. rate for a 30-year fixed-rate home loan fell to 6.6% from 6.73% last week, according to a report from Freddie Mac on Thursday. A boost in competition for bonds including Treasuries and mortgage-backed securities typically results in lower yields for investors and cheaper borrowing costs for homebuyers.