Mortgage rates were mostly in a holding pattern leading up to a meeting of the Federal Open Market Committee. And with the Fed delivering no surprises in their statement that followed, mortgage rates aren't likely to show much movement in response. The Fed's ongoing purchases of mortgage-backed debt are holding mortgage rates at compelling levels, but this won't be the case indefinitely. As the Fed gradually withdraws support from the market, mortgage rates seem destined to eventually move higher. Homeowners looking to refinance should act with some urgency to lock in fixed mortgage rates that are near record lows, as there are no guarantees about just how long that will continue to be the case. An improving economic climate and large government debt auctions represent potential catalysts for higher mortgage rates. Mortgage rates are closely related to long-term government bonds.
Mortgage rates are more than one full percentage point lower than one year ago. This time last year, the average 30-year fixed mortgage rate was 6.44 percent, meaning a $200,000 loan would have carried a monthly payment of $1,256.25. With the average rate now 5.35 percent, the monthly payment for the same size loan would be $1,116.83, a savings of $139 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 5.35% - unchanged from last week (avg. points: 0.31)
15-year fixed: 4.72% - down from 4.74% last week (avg. points: 0.24)
5/1 ARM: 4.64% - unchanged from last week (avg. points: 0.29)
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.
