NEW YORK, NY - Mortgage rates stayed at record lows this week, with the average conforming 30-year fixed mortgage remaining unchanged at 4.5 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.36 discount and origination points. The average 15-year fixed mortgage retreated to 3.94 percent, and the larger jumbo 30-year fixed rate inched lower to 5.16 percent. Adjustable rate mortgages hit new lows also, with the average 5-year ARM decreasing to 3.68 percent and the average 7-year ARM falling to 3.91 percent.
Mortgage rates remain at record lows, not as a result of poor economic data, but rather in expectation of additional efforts by the Federal Reserve to revive the economy. Specifically, investors are counting on the Fed to resume quantitative easing - purchases of government bonds in an effort to drive market interest rates even lower. Investors have been front-running the Fed by buying government debt now, bringing bond yields to ultra-low levels. Mortgage rates tend to move closely with yields on long-term government bonds, but didn't fall in tandem with government debt yields this week. Mortgage bond investors are pricing for the risk that loans could be refinanced if the Fed's efforts reduce mortgage rates further.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate at 4.5 percent, the monthly payment for the same size loan would be $1,013.37, a savings of $228 per month for a homeowner refinancing now.
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
For a full analysis of this week's move in mortgage rates, go to: www.bankrate.com.
The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. More than half of the panelists, 63 percent, expect mortgage rates to remain more or less unchanged. According to 21 percent of the panelists, mortgage rates will increase while the remaining 16 percent think rates will decline over the next week.
For the full mortgage Rate Trend Index, go to: www.bankrate.com/RTI.
The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe, CreditCardGuide.com, Bankaholic, CreditCards.com and NetQuote. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 500 newspapers. Bankrate, Inc. was acquired by Apax Partners, one of the world's leading private equity investment groups, in September 2009. Apax operates across the United States, Europe and Asia and has more than 30 years of investing experience.