NEW YORK, NY - Mortgage rates unwound last week's increase, with the benchmark 30-year fixed mortgage rate pulling back to 3.90 percent, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.29 discount and origination points.
The average 15-year fixed mortgage dropped to 3.15 percent while the larger jumbo 30-year fixed mortgage settled at 4.07 percent. Adjustable rate mortgages were down also, with the 5-year ARM falling to 3.22 percent and the 7-year ARM sinking to 3.44 percent.
Mortgage rates moved lower this week after indications that maybe the Federal Reserve isn't going to raise interest rates as soon as markets had thought. The minutes from the Federal Open Market Committee's January meeting showed a hesitancy to raise interest rates on the part of Fed members. The concern was that, despite recent signs of improvement in the job market and overall economy, raising interest rates too soon could douse the recovery. Since mortgage rates, and long-term bond yields, move in anticipation of Fed interest rate moves, any change in the outlook for Fed action can have a pronounced effect on mortgage rates. Mortgage rates are closely related to yields on long-term government bonds.
One year ago, the average 30-year fixed mortgage rate was 4.48 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,011.00. With the average rate now at 3.90 percent, the monthly payment for the same size loan would be $943.34, a savings of $67 per month for anyone refinancing now.
30-year fixed: 3.90% -- down from 3.96% last week (avg. points: 0.30)
15-year fixed: 3.15% -- down from 3.21% last week (avg. points: 0.18)
5/1 ARM: 3.22% -- down from 3.31% last week (avg. points: 0.20)
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. Two-thirds of the panelists, 67 percent, expect mortgage rates to continue falling. One-in-four forecast that mortgage rates will remain more or less unchanged, while just 8 percent predict that mortgage rates will rise.
Source: BankRate.com / #Housing #Economy