Bankrate: Mortgage Rates Fall to Four-Month Low
-- WITH LOGO -- TO BUSINESS EDITOR:
NEW YORK, Aug. 5 /PRNewswire-FirstCall/ -- Fixed mortgage rates plunged on slower-than-expected economic growth in the second quarter. Gross Domestic Product, the primary measure of economic output, expanded at an annualized rate of 3 percent in the second quarter, falling short of expectations calling for growth of 3.5 percent or more. In Bankrate.com's weekly national survey of large lenders, the average 30-year fixed rate mortgage fell to 6.02 percent and is now the lowest since April 14. The 30-year fixed rate mortgages in this week's survey had an average of 0.36 discount and origination points.
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The 15-year fixed rate mortgage popular for refinancing fell from 5.59 percent to 5.42 percent. The average rate for the jumbo 30-year fixed rate mortgage dropped from 6.32 percent to 6.22 percent, and the average one-year adjustable rate mortgage declined from 4.43 percent to 4.35 percent.
After a strong consumer confidence reading seemed to counter weeks of data showing tepid economic growth, slower-than-expected economic expansion and a drop in consumer spending pushed mortgage rates to a four-month low. Yields on long-term government bonds, to which mortgage rates are closely related, quickly reversed the increases seen following the consumer confidence reading. The mortgage rate volatility is likely to continue following the Aug. 6 employment report. After a disappointing report one month ago, more lackluster job growth could spell trouble economically and push mortgage rates even lower. Yet an improving job picture could cause another upward bounce in mortgage rates.
As mortgage rates fall, so do monthly payments. Two months ago, when the average 30-year fixed mortgage rate was 6.34 percent, the monthly payment on a $165,000 loan was $1,025.61. With the average rate now 6.02 percent, the monthly payment on the same $165,000 loan is $991.38. The difference in monthly payments of $34.23 amounts to more than $12,300 over the loan term.
30-year fixed: 6.02% -- down from 6.17% last week (avg. points: 0.36)
15-year fixed: 5.42% -- down from 5.59% last week (avg. points: 0.35)
1-year ARM: 4.35% -- down from 4.43% last week (avg. points: 0.21)
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.
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. Respondents are evenly split this week, but they agree on one thing: mortgage rates are unlikely to head lower. Half of respondents expect rates to rise, while the other half expect rates to remain unchanged in the next 30 to 45 days.
For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates
For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI
About Bankrate, Inc.
Bankrate, Inc. (Nasdaq: RATE) owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Bankrate.com averages 4.4 million unique visitors per month, according to comScore Media Metrix, which ranks Bankrate.com first in unique visitors in the "Financial Information and Advice" category. Bankrate.com reviews more than 4,800 financial institutions in more than 300 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of more than 250 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: TWX), The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 100 national and state publications.
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