Fixed mortgage rates hit yet another new low this week following last Friday's disappointing employment report. Weak growth in private sector payrolls - just 41,000 new jobs in May - called into question the overall strength and sustainability of the U.S. economic recovery. Nervous investors again piled into the safe haven of U.S. Treasury notes, which helped bring mortgage rates to previously unseen levels. Weak hiring will further postpone the timeframe when the Federal Reserve begins boosting short-term interest rates, which is also helping keep mortgage rates low.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.88 percent, the monthly payment for the same size loan would be $1,059.02, a savings of $182 per month for a homeowner refinancing now, according to Bankrate.com's Mortgage Payment Calculator.
SURVEY RESULTS
30-year fixed: 4.88% - down from 4.95% last week (avg. points: 0.5)
15-year fixed: 4.33% - down from 4.36% last week (avg. points: 0.45)
5/1 ARM: 4.16% - down from 4.21% last week (avg. points: 0.41)