Movements in mortgage rates were subtle during the holiday season, with little in the way of economic data or market volatility to push rates one way or the other. The most significant news came in the form of better home sales figures for November. This pushed bond yields higher on the belief that the Federal Reserve would be unlikely to cut interest rates any time soon. Mortgage rates are closely related to the yields on long-term government bonds.
Fixed mortgage rates are sharply lower since the Fed stopped raising interest rates. Six months ago, the average 30-year fixed mortgage rate was 6.91 percent. At the time, the monthly payment on a loan of $165,000 was $1,087.79. With the average 30-year fixed rate now 6.24 percent, the same loan originated today would carry a monthly payment of $1,014.86. 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 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. The panelists have mixed opinions. Half predict rates will remain unchanged in the coming weeks, while 20 percent forecast a decline. The remaining 30 percent expect rates to rise in the coming 30 to 45 days.
