Supply of homes and mortgage rates drop in US

Wall Street's anxiety over the Trump administration's trade war with China could herald lower mortgage rates for homebuyers, but a chronic shortage of houses for sale will keep prices high. Investors fearful that the trade war could sharply slow global economic growth have been buying bonds, sending the yield on the 10-year Treasury note to its lowest level since October 2016. The average rate on the 30-year fixed-rate mortgage, which tracks the trajectory in 10-year Treasurys, fell this week to 3.60%, its lowest level since November 2016, according to Freddie Mac. It was 3.75% last week. A year ago the rate stood at 4.59%. If the slide in bond yields continues, the average rate on the benchmark 30-year home loan could fall below 3.5%, housing economists say. Lower mortgage rates give homebuyers more purchasing power, which could entice them to go house-hunting.