- 4.75% (30-year fixed)
- 0.4 (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 May 25, 2011.
With interest rates on U.S. Treasuries continuing to fall and a new study showing continuing declines in home prices nationally, mortgage rates edged slightly lower this week.
The benchmark fixed-rate 30-year mortgage dipped by 2 basis points, averaging 4.75 percent in the latest Bankrate weekly survey. A basis point is one-hundredth of 1 percentage point.
Another popular home loan product, the 15-year fixed-rate mortgage, made an identical decline, falling 2 basis points to an average of 3.93 percent. With 30-year jumbo mortgages, or generally those for more than $417,000, the average rate was 5.21 percent, off by a single basis point.
With adjustable-rate mortgages, the 5/1 ARM was 3.45 percent, off 3 basis points.
The strong demand for U.S. government bonds, or Treasuries, has helped put downward pressure on mortgage rates in recent weeks. Concerns that the U.S. economy is weakening, and that the financial crisis in the eurozone is far from over, has investors seeking the safety of U.S. federal debt, which is considered among the safest investments in the world.
With bonds, yields move inversely to price. So as the demand for Treasuries has driven their prices up, their yields have fallen. Mortgages typically move in the same direction as the interest rates on long-term Treasuries.
"The data's been a little weak in the U.S., and the uncertainty in Europe is leading to a flight-to-quality bid," Jason Rogan, director of U.S. government trading at Guggenheim Partners in New York, told the Bloomberg news service.
At the same time, a new release from the Federal Housing Finance Agency, or FHFA, showed that U.S. house prices fell in the first quarter of this year. The FHFA report, released Wednesday, said prices were off 5.5 percent from the first quarter of 2010. FHFA is the federal agency charged with oversight of mortgage giants Freddie Mac and Fannie Mae.
"In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery," said Edward J. DeMarco, director of the FHFA, in a prepared statement.
Find out what your monthly mortgage payment could be using Bankrate's mortgage calculator.-- Gregg Fields