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Posted June 9, 2014
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Mortgage rates have made another new low.
According to Freddie Mac's weekly mortgage rate survey of 125 banks nationwide, the average 30-year fixed-rate mortgage rate fell 0.02 percentage points last week to reach 4.12%.
It's the fifth straight week that current mortgage rates have dropped and marks the longest mortgage rate winning streak in more than a year.
Looking for low mortgage rates? Today's the day to find them.
Mortgage Rates Drop For 5th Straight Week
Conventional 30-year fixed-rate mortgage rates dropped for the 5th straight week this week, falling to 4.12%. The rate is available to borrowers willing to pay 0.6 discount points at closing and is an average rate nationwide.
Many mortgage applicants are locking rates even lower than 4.12% -- some are locking in the 3s. It's the second-lowest weekly reported rate since 12 months ago.
The 15-year fixed rate mortgage fell last week as well, moving to 3.21 percent with an accompanying 0.5 discount points to be paid at closing. This, too, approaches a one-year best for the benchmark rate.
Freddie Mac's reported mortgage rates are available borrowers of prime credit quality where "prime" is defined as having a credit score of 740 or higher; showing a loan-to-value of eighty percent or lower; and using the loan to make a purchase of a home.
For other borrowers, such as those doing a refinance to lower mortgage rates, or using "special" loan programs such as the HARP loan and the 5-10 Properties program for investors with more than 4 properties financed. mortgage rates will be minimally higher.
Mortgage rates will also be different for loans which are not "conventional"; that is, backed by Fannie Mae or Freddie Mac. This includes mortgage rates for FHA loans. for VA loans. and for USDA loans . Rates for these loan types are similarly low, however.
U.S. lenders are currently quoting FHA mortgage rates, VA mortgage rates and USDA mortgage rates in the 3s.
How Far Will Mortgage Rates Fall?
For today's home buyers and refinancing households, the current mortgages rates are an unexpected surprise. 2014 was supposed to be the year that mortgage rates moved to 5 percent and
higher. Maybe they still will.
For now, however, U.S. mortgage rates are in the midst of a winning streak. Rates are down for five straight weeks and appear headed for a sixth week of decline, too.
It's been nearly 90 weeks since mortgage rates dropped 6 weeks in-a-row. It's been nearly three years since they've dropped through seven. The market does has momentum, however.
Of course, none of this was supposed to happen at all.
At the start of the year, the Federal Reserve announced it would "taper" QE3, its mortgage rate-suppressing stimulus program. The Fed had been purchasing $40 billion in mortgage-backed securities (MBS) monthly.
As the scope of QE3 shrank, reduced demand for mortgage bonds was expected to to send bond yields higher, which would boost consumer mortgage rates. The mortgage bond market is where mortgage rates are made. if you didn't know.
Well, today, the Fed's QE3 purchases amount have been halved to $20 billion monthly. Yet, mortgage rates are dropping. This is because outside investors are entering the mortgage bond market faster than the Fed can leave it.
Global economic uncertainty and the potential for war have boosted demand for mortgage-backed bonds, and U.S. consumers are benefitting.
Rates may continue to drop as QE3 continues it taper. You may not want to gamble on that, though. At today's mortgage rates, 1-point rise in mortgage rates will reduce your maximum home purchase price by 12%.
Compare Today's Live Mortgage Rates Now
2014 mortgage rates are defying expectation. Wall Street said rates would rise this year. U.S. consumers said mortgage rates would rise this year. And, practically every surveyed loan officer nationwide said mortgage rates would rise this year
Thus far, though, mortgage rates are not rising. After five straight week of declines, they've moved to near one-year bests. It's a great time to compare today's rates.
Get a live mortgage rate quote now. Rates are available online at no cost, with no obligation, and with no social security number required to get started.
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