NEW YORK, NY - Mortgage rates were down for the second week in a row, with the benchmark 30-year fixed mortgage rate sliding to 4.28 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.31 discount and origination points.
The average 15-year fixed mortgage rate fell to 3.39 percent, while the larger jumbo 30-year fixed mortgage rate sank to 4.31 percent. Adjustable rate mortgages were lower, with the 5-year ARM dropping to 3.33 percent and the 7-year ARM pulling back to 3.57 percent.
Mortgage rates fell further over the past week as the Federal Reserve reaffirmed their low interest rate stance, dismissed recent readings on inflation as "noisy," and we learned the economy contracted 2.9 percent in the first quarter of 2014. Each of these is enough to not only keep a lid on government bond yields, but exert a downward pull. Any economic worries prompt investors to favor the safety of U.S. government bonds. Mortgage rates are closely related to yields on long-term government debt.
As 2013 came to a close, the average 30-year fixed mortgage rate was 4.69 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,036.07. After drifting lower for much of the first half of 2014, the average rate is now 4.28 percent, and the monthly payment for the same size loan would be $987.40, a savings of nearly $49 per month for anyone that waited.
30-year fixed: 4.28% -- down from 4.33% last week (avg. points: 0.31)
15-year fixed: 3.39% -- down from 3.44% last week (avg. points: 0.18)
5/1 ARM: 3.33% -- down from 3.37% last week (avg. points: 0.22)
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. Panelists are split, with 53 percent forecasting a decrease in mortgage rates over the coming week, while 47 percent expect mortgage rates will remain more or less unchanged. Interestingly, none of the respondents predicts an increase in mortgage rates over the next seven days.