Sunday, April 24, 2011

MORTGAGE & FINANCE: Mortgage Rates Inch Lower

Mortgage rates were mostly lower, with the benchmark conforming 30-year fixed mortgage rate now 5.07%, according to’s weekly national survey. The average 30-year fixed mortgage has an average of 0.4 discount and origination points.
The average 15-year fixed mortgage ticked higher to 4.28%, and the larger jumbo 30-year fixed rate slipped to 5.55%. Adjustable rate mortgages were also lower, with the average 5-year ARM sinking to 3.83% and the 7-year ARM pulling back to 4.19%.  
The movement in mortgage rates has been tame in recent weeks. Mortgage rates have been range-bound, having remained within a one-quarter percentage point band over the past two months. Historically, mortgage rates and bond yields can show very little movement over an extended period of time but then move significantly in a relatively short period of time. If upcoming inflation numbers spook the markets, for example, that could be the catalyst for a sudden move in bond yields and mortgage rates. Mortgage rates are closely related to yields on long-term government bonds.
The last time mortgage rates were above 6% was Nov. 2008. At the time, the average 30-year fixed rate was 6.33%, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 5.07%, the monthly payment for the same size loan would be $1,082.22, a difference of $159 per month for anyone refinancing now.

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