- 4.54% (30-year fixed)
- 0.39 (average points)
It may seem odd to think of the U.S. as a safe haven for the world's savings in the wake of the recently resolved debt crisis, but that's exactly how the world is treating the U.S. mortgage market. Mortgage rates were down across the board as investors spooked by poor economic numbers this week and a worsening European debt crisis fled to mortgage-backed securities.
The 30-year fixed-rate mortgage fell 20 basis points, to 4.54 percent from 4.74 percent last week. A basis point is one-hundredth of 1 percentage point.
Another popular mortgage product, the 15-year fixed-rate home loan, followed closely behind, dropping 15 basis points from 3.83 percent to 3.68 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, was 5.06 percent, down 13 basis points from last week's rate.
Adjustable-rate mortgages followed their fixed-rate relatives downward. The 5/1 ARM tumbled 11 basis points from last week's 3.34 percent to 3.23 percent. With a 5/1 ARM the rate is fixed for five years and adjusted annually thereafter.
Consumers responded to sharply lower mortgage rates this week by increasing their borrowing activity substantially. The Mortgage Bankers Association reported mortgage applications were up 7.1 percent today compared to one week earlier.
Refinancing still accounts for the lion's share of mortgage activity, with 70.1 percent of mortgage loans going toward refinancing rather than home purchases, and that's up from 69.6 percent last week, according to the MBA report.