NEW YORK, NY - Fixed mortgage rates fell to new record lows this week, with the benchmark 30-year fixed mortgage sinking to 3.70 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.43 discount and origination points.
The average 15-year fixed mortgage rate plunged to 2.95 percent and the larger jumbo 30-year mortgage retreated to 4.32 percent, both record lows. Adjustable mortgage rates reset record lows also, with the 5-year and 7-year ARMs dropping to record lows of 2.69 percent and 2.87 percent, respectively.
The Federal Reserve's unveiling of a new stimulus program known as QE3, in which they'll be buying $40 billion of mortgage-backed securities each month on an open-ended basis exceeded the market's expectations and helped bring mortgage rates to new lows. Unhappy with the pace of economic recovery or job growth, the Fed felt compelled to take additional measures, even if those measures will be more effective at boosting the stock market and reducing interest rates than the stated intentions of lifting economic output and aiding job growth.
The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 3.7 percent, the monthly payment for the same size loan would be $920.57, a difference of $321 per month for anyone refinancing now.
SURVEY RESULTS
30-year fixed: 3.70% -- down from 3.81% last week (avg. points: 0.43)
15-year fixed: 2.95% -- down from 3.04% last week (avg. points: 0.37)
5/1 ARM: 2.69% -- down from 2.75% last week (avg. points: 0.39)
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. There is no clear consensus again this week, with 46 percent of the panelists expecting mortgage rates to remain more or less unchanged in the next week and 39 percent predicting further declines. Just 15 percent foresee an increase in mortgage rates over the coming week.