US Mortgage Rates Slide to 5-Month Low

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With a flurry of news breaking in Washington, US mortgage rates moved to the downside with the benchmark 30-year fixed mortgage rate falling to a five-month low of 4.15%, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.25 discount and origination points.

The larger jumbo 30-year fixed slid to 4.08%, and the average 15-year fixed mortgage rate dropped to 3.35%. Adjustable mortgage rates were on the decline as well, with the 5-year ARM sinking to 3.42% and the 7-year ARM reverting to where it had been two weeks ago at 3.62%.

There’s nothing like a good old fashioned political crisis to make investors nervous and bring mortgage rates lower. Mortgage rates are closely related to yields on long-term government bonds, which have been in high demand amid the turmoil in Washington. While the White House scandal was the catalyst for a measurable drop in the past couple days, mortgage rates had already moved a bit lower thanks to a slower than expected rise in consumer prices. Another factor helping keep long-term yields, and mortgage rates by extension, in check is that the Federal Reserve seems poised to raise short-term interest rates as soon as June. An increase in short-term rates can be seen as good news by long-term bond investors as it keeps the inflation genie in the bottle.

At the current average 30-year fixed mortgage rate of 4.15%, the monthly payment for a $200,000 loan is $972.21.

SURVEY RESULTS

30-year fixed: 4.15% — down from 4.22% last week (avg. points: 0.25)
15-year fixed: 3.35% — down from 3.44% last week (avg. points: 0.21)
5/1 ARM: 3.42% — down from 3.48% last week (avg. points: 0.30)

(Source: Bankrate.com)

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