Wednesday, June 16, 2010

Mortgage rates return to 2010 low

The low rates, combined with weakened housing prices, provide a great opportunity for homebuyers. Yet many markets are still far from a turnaround.

[Related content: homes, interest rates, mortgage, loans, financial planning]
Mortgage rates have fallen to their lowest point for the year.

The benchmark 30-year fixed-rate mortgage fell 5 basis points over the past week, to an average of 5.07%, according to the national survey of large lenders. (A basis point is one-hundredth of a percentage point.) That ties the 2010 low from the March 17 survey.

The mortgages in the latest survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index was 5.21%; it was also 5.21% four weeks ago.

Check mortgage rates near historical lows

The benchmark 15-year fixed-rate mortgage slipped 4 basis points, to an average of 4.45%. The benchmark 5/1 adjustable-rate mortgage also dropped 4 basis points, to 4.27%.

Invisible fall
But if mortgage rates tumble across America and nobody sees the drop, does it really happen? $150 million home for sale

When the stock market suddenly plunged nearly 1,000 points in a few minutes May 6, mortgage rates also collapsed. By some accounts, rates fell to about 4.5% on the 30-year fixed and below 4% for some adjustable-rate mortgages.

But mortgage professionals say the rock-bottom borrowing costs didn't last long and went largely unnoticed by the public.

"I think it kinda sailed over everyone's heads because everyone was hypnotized by the crash in the stock market," says Jeff Lazerson, the president of Mortgage Grader in Laguna Niguel, Calif.

Chris Sipe, a senior loan officer at Embrace Home Loans in Frederick, Md., says that when rates fell, he experienced a "little pop" in refinance activity -- but mostly because he called clients to alert them to the unexpected opportunity.

No comments: