The average 15-year fixed rate mortgage popular for refinancing dropped to 5.81 percent, while the average jumbo 30-year fixed rate dipped modestly to 7.41 percent. Adjustable mortgage rates were also lower, with the average 3/1 ARM retreating to 6.08 percent and the average 5/1 ARM sinking to 6.08 percent.
Mortgage rates posted the biggest one-week drop since March, taking fixed mortgage rates to levels last seen in May. The decline in mortgage rates came as the margin between fixed mortgage rates and risk-free Treasuries contracted from a 22-year high just one week ago. With spreads currently in the neighborhood of 250 basis points, down from more than 280 basis points last week, they're still far above the historical norms of 160-180 basis points. With the record number of delinquencies and foreclosures, coupled with the ongoing credit crunch, mortgage rates are likely to remain at wider than usual spreads for some time to come. The takeover is already paying dividends through lower mortgage rates, and puts some additional buying power behind well-qualified borrowers.
One month ago the average 30-year fixed mortgage rate was 6.74 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,295.87. But at today's rate of 6.15 percent, a $200,000 loan would mean a monthly payment that is $77 per month lower, at $1,218.46.
SURVEY RESULTS
30-year fixed: 6.15% - down from 6.55% last week (avg. points: 0.43)
15-year fixed: 5.81% - down from 6.09% last week (avg. points: 0.38)
5/1 ARM: 6.08% - down from 6.29% last week (avg. points: 0.40)
