It wasn’t too long ago when we saw mortgage rates fall to historic lows. While there has been some fluctuation, rates haven't gone up by much. In fact, they have been falling again. This week’s mortgage rates have dropped for the sixth week in a row.
- For a 30-year fixed rate mortgage, qualified mortgage borrowers can expect to get a rate of about 4.77 percent. That’s a 0.15 percent drop from last week’s rate of 4.82 percent.
- For a 15-year fixed rate mortgage loan, you can expect to pay about 3.95 percent if you qualify for the lowest mortgage rates. That’s a 0.05 percent drop from last week’s 4.00 percent.
- Qualified buyers looking for a 30-year fixed jumbo mortgage can expect to pay a rate of 5.22 percent.
- Adjustable rate mortgage rates have also fallen. For a 5-year ARM, the current average rate stands at about 3.48 percent. For a 7-year ARM, the current rate is just a bit higher at 3.73 percent.
The 30-year fixed rate is at its lowest point in five months. This is a surprising turn of events for many in the mortgage industry who expected rates to increase once the Fed stopped buying mortgage backed securities and wound down its purchase of Treasury securities. For now, several weak economic reports have pushed pushed down Treasury yields, which have reduced mortgage rates. If the economy continued to slog along, rates will remain low.
The looming confrontation over the US debt ceiling is the rate wildcard.. If a pact isn't reached, expect rates to go up in August, when the debt ceiling will be reached and a default will occur. A default is unlikely though. I expect that the government to wait until the last minute, with political brinksmanship ruling the day, before approving the increase in the debt ceiling.
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