NEW YORK, NY - Mortgage rates fell sharply as global economic worries rattled financial markets, with the benchmark 30-year fixed mortgage rate plunging to a 17-month low of 4.01 percent, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.23 discount and origination points.
The average 15-year fixed mortgage rate sank to 3.23 percent, while the larger jumbo 30-year fixed mortgage rate plummeted to 4.09 percent. Adjustable rate mortgages were also lower, with the 5-year ARM descending to 3.09 percent and the 7-year ARM tumbling to 3.36 percent.
Worries about slower growth in the global economy have unnerved financial markets in recent weeks, and mortgage shoppers are the happy beneficiaries. Mortgage rates have fallen for four consecutive weeks, with the benchmark 30-year fixed mortgage rate at the lowest level since June 2013. The 15-year fixed mortgage rate and both the 3-year and 5-year adjustable rate mortgage products are the lowest since May 2013. Both bond yields and mortgage rates have dropped sharply as nervous investors have piled into safe haven, less volatile investments. Mortgage rates are closely related to yields on long-term government bonds.
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. Mortgage rates have moved lower thus far in 2014, and with the average rate now 4.01 percent, the monthly payment for the same size loan would be $955.98, a savings of $80 per month for anyone that waited.
SURVEY RESULTS
30-year fixed: 4.01% -- down from 4.18% last week (avg. points: 0.23)
15-year fixed: 3.23% -- down from 3.37% last week (avg. points: 0.11)
5/1 ARM: 3.09% -- down from 3.27% last week (avg. points: 0.13)
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 isn't a majority opinion this week, but 45 percent of the panelists predict that mortgage rates will keep falling. The remainder are evenly split, with 27 percent forecasting a rebound in mortgage rates and 27 percent expecting mortgage rates will remain more or less unchanged in the coming week.