Mortgages
- 4.46% (30-year fixed)
- 0.36 (average points)
Mortgage rates took another dip this week thanks to turmoil in the financial markets worldwide. The downgrade of the U.S. credit rating and the aggravation of the debt crisis in Europe injected fear in the market, and investors sought safety in U.S. Treasuries and mortgage bonds. The Fed's announcement that it will keep the key interest rate near zero percent also helped rates.
The 30-year fixed-rate mortgage fell 8 basis points, to 4.46 percent from 4.54 percent last week. A basis point is one-hundredth of 1 percentage point.
The 15-year fixed-rate dropped 7 basis points from 3.68 percent to 3.61 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, was 5.02 percent, down 4 basis points from last week's rate.
Adjustable-rate mortgages barely changed. The 5/1 ARM rose 1 basis point to 3.24 percent.
The sharp decline in rates led to a surge in mortgage applications. According to the Mortgage Bankers Association, mortgage applications were up 21.7 percent last week compared to one week earlier. Refinances accounted for 75.6 percent of all applications.