Mortgage rates fall sharply as the Federal Reserve brings stability to the mortgage market

Mortgage rates seesawed lower this week after the Federal Reserve stepped in to provide some assurance to lenders who were at a loss as to how to price home loans amid the disruptions caused by the coronavirus emergency.

The 30-year fixed-rate mortgage dropped to 3.50% during the week ending March 26, Freddie FMCC, -6.55%reported Thursday. That represented a significant decrease of 15 basis points from last week, when rates surged to the highest level since January.

Meanwhile, the 15-year fixed-rate mortgage fell 14 basis points to 2.92%. Apart from last week, the average rate for 15-year fixed home loans has remained below 3% since January.

The trajectory for the 5-year Treasury-indexed hybrid adjustable-rate mortgage was quite different, however. These rose a staggering 23 basis points to an average of 3.34%, the highest level since mid-January.