NEW YORK, NY - Mortgage rates began the new year by moving lower, with the benchmark 30-year fixed mortgage rate dropping to 3.85 percent, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.31 discount and origination points.
The average 15-year fixed mortgage plunged to 3.16 percent while the larger jumbo 30-year fixed mortgage retreated to 4.01 percent. Adjustable rate mortgages were broadly lower also, with the 5-year ARM sinking to 3.20 percent and the 7-year ARM pulling back to a nearly 3-month low of 3.41 percent.
As we start 2015, concerns about the global economy still have a tight grip on markets, bringing bond yields and mortgage rates lower. Financial markets have been jittery as investors mull the continued decline in oil prices, and what that says about the weakness of the global economy. Yields on the benchmark 10-year Treasury note dropped below the 2 percent threshold for the first time since October, bringing about fresh declines in mortgage rates. Mortgage rates remain the lowest since May 2013. Mortgage rates are closely related to yields on long-term government bonds.
One year ago, the average 30-year fixed mortgage rate was 4.64 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,030.08. With the average rate now at 3.85 percent, the monthly payment for the same size loan would be $937.62, a savings of $92 per month for anyone refinancing now.
30-year fixed: 3.85% -- down from 3.99% last week (avg. points: 0.31)
15-year fixed: 3.16% -- down from 3.27% last week (avg. points: 0.19)
5/1 ARM: 3.20% -- down from 3.32% last week (avg. points: 0.19)
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, 55 percent, expect mortgage rates to continue falling. Just over one-third of respondents, 36 percent, forecast an increase with only 9 percent predicting that mortgage rates will remain more or less unchanged in the coming week.