Mortgage Rates Rebound, Bankrate
NEW YORK - January 31, 2008 - After the sharpest four-week decline in more than 18 years, mortgage rates bounced back, with the average conforming 30-year fixed mortgage rate now 5.88 percent. According to Bankrate.com’s weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.38 discount and origination points.
The average 15-year fixed rate mortgage popular for refinancing jumped to 5.38 percent, and the average jumbo 30-year fixed rate leapt to 7.03 percent. Adjustable mortgage rates were no different, with the average one-year ARM rising to 5.60 percent, and the average 5/1 ARM climbing to 5.66 percent.
Mortgage rates reversed course in the past week, but much of that move came within a 24-hour span last week that saw the equity and bond markets each do an about-face. While mortgage rates are not directly impacted by Federal Reserve interest rate cuts, to many traders the bond market appeared overbought and the stock market oversold in the wake of an emergency three- quarter point rate cut last week. Despite another interest rate cut this week, mortgage rates moved higher, dispelling a common misconception that mortgage rates take their cues from the Fed. Instead it is the outlook for the economy and inflation that are the real drivers of fixed mortgage rates. Even with the increase in rates over the past week, fixed mortgage rates remain below 6 percent. Refinancing and locking in a permanently affordable monthly payment is an attractive option for many homeowners facing the uncertainty of adjustable mortgage resets.
Fixed rate mortgages are currently the most attractive option for borrowers. Six months ago, the average 30-year fixed mortgage rate was 6.71 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,291.88. Now that the average conforming 30-year fixed rate is 5.88 percent, the same $200,000 loan carries a monthly payment of $1,183.71.
SURVEY RESULTS
30-year fixed: 5.88% — up from 5.57% last week (avg. points: 0.38)
15-year fixed: 5.38% — up from 5.11% last week (avg. points: 0.35)
5/1 ARM: 5.66% — up from 5.35% last week (avg. points: 0.33)
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 http://www.bankrate.com/mortgagerates
The survey is complemented by Bankrate’s weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. Most respondents say rates will continue to move higher, with 59 percent predicting mortgage rates will rise further. Just 25 percent feel mortgage rates could fall back and the remaining 16 percent expect rates to remain more or less unchanged in the coming 30 to 45 days.
For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI
About Bankrate, Inc.
Bankrate, Inc. owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2006, Bankrate.com had nearly 53 million unique visitors. Bankrate provides financial applications and information to a network of more than 75 partners, including Yahoo! , America Online , The Wall Street Journal and The New York Times . Bankrate’s information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate also owns and operates Bankrate Select, an Internet lead aggregator, Mortgage-calc.com, which provides consumers with financial calculators, Mortgage Market Information Services, Inc. and Interest.com, Inc., each of which publishes mortgage guides and financial rates and information, Nationwide Card Services (NCS), which markets a comprehensive line of consumer and business credit cards via the Internet and Savingforcollege.com, the premier Internet destination for objective information about 529 college savings plans.
contact:
Kayleen Keneally
Senior Director, Corporate Communications 917-368-8677