Mortgage Rates Retreat on Inflation News
Fixed mortgage rates broke a string of four consecutive increases by dipping this week in response to favorable news on the inflation front, according to Bankrate’s national survey of large lenders.
The average 30-year fixed mortgage rate slid to 6.29 percent, with an average of 0.27 discount and origination points, says Bankrate, which operates the consumer finance Web site Bankrate.com. The average 15-year fixed rate mortgage, popular for refinancing, inched lower to 6.02 percent.
With larger loans, the average jumbo 30-year fixed rate nosed higher to 6.59 percent. On adjustable rate mortgages, the average 5/1 ARM sank 6.11 percent and the average one-year ARM held at 6 percent.
The alternating good news/bad news on the economy has kept mortgage rates in a narrow band of approximately one-eighth of a percentage point in the past two months.
Mortgage rates had increased in each of the four prior weeks, aided by comments from the Federal Reserve about the focus on taming inflation. But several inflation readings in the past week served to calm the nerves of investors, and the upward momentum on Treasury yields and mortgage rates subsided.
Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates. At the time, the average 30-year fixed mortgage rate peaked at 6.93 percent, and a $165,000 loan carried a monthly payment of $1,090. With the average 30-year fixed rate now 6.29 percent, the same loan originated today would carry a monthly payment of $1,020.23. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.
Bankrate's national weekly mortgage survey is conducted each Wednesday, compiled from data provided by the top 10 banks and thrifts in the top 10 markets.
Source: Bankrate