Mortgages
- 4.94% (30-year fixed)
- 0.42 (average points)
Here's a look at the state of mortgage rates from Bankrate.com's weekly national survey of large banks and thrifts conducted Jan. 6, 2011.
Despite a housing market that is, by many measures, highly affordable, demand remains weak and mortgage rates sank in the latest national survey by Bankrate.
The benchmark 30-year, fixed-rate mortgage fell 8 basis points, to 4.94 percent. A basis point is one-hundredth of 1 percentage point. Last week's rate of 5.02 percent was the first time the 30-year mortgage had been above 5 percent since last May.
Other rates fell as well this week, though not by as much. The 15-year, fixed-rate mortgage declined 7 basis points, settling at 4.32 percent.
With adjustable-rate mortgages, the popular 5/1 ARM was stable, falling just 1 basis point to 3.99 percent. With a 5/1 ARM, the interest rate is fixed for five years, then adjusted annually thereafter for the life of the loan, to reflect market conditions.
The falling mortgage rates reflect a housing market that remains quite weak, but it's beginning to show signs it's flickering to life.
According to the National Association of Realtors, pending home sales -- which reflect contracts, not closings -- rose in November. The trend over the last five months indicates a gradual recovery into 2011, said Lawrence Yun, the NAR's chief economist, although the organization's Pending Home Sales Index is still 5 percent below a year ago.
"In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market," Yun said in a release. "But further gains are needed to reach normal levels of sales activity."
Yun noted that the U.S. added 27 million people in the last decade, but the number of jobs is comparable to 2000 levels. The NAR is predicting existing-home sales to rise about 8 percent in 2011. But prices will remain essentially unchanged, up 0.6 percent.
That's similar to the view of Casey Mulligan, a University of Chicago economist whose blog post appeared in The New York Times this week. "Predicting the future is difficult, but the price and construction data so far do not seem to suggest that home values will be significantly different this year than they were in 2010," Mulligan wrote.
Find out what your monthly mortgage payment could be using Bankrate's mortgage calculator.
-- Gregg Fields