Japan exports lower mortgage rates to the States

Mortgage rates fell for the fifth week in a row as overseas concerns, including volatile oil prices, slid their way back into the international spotlight.

Treasury yields plunge

The 10-year Treasury yield has fallen about 20 basis points over the past week, going from 2.02% to an intraday low of about 1.81% Wednesday. This is the lowest the 10-year yield has been since April.

The latest declines in Treasury yields started when the Bank of Japan reduced interest rates, pushing them into negative territory. This caused investors to flock to government bonds, driving prices up and yields down. Yields moved even lower as oil prices fell below $30 a barrel and disappointing data about the U.S. economy's nonmanufacturing sector made headlines.

Mortgage rates usually follow the direction of long-term government bonds.

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A look at rates this week

  • The benchmark 30-year fixed-rate mortgage fell to 3.88% from 3.94%, according to Bankrate's Feb. 3 survey of large lenders. A year ago, it was 3.8%. Four weeks ago, the rate was 4.11%. The mortgages in this week's survey had an average total of 0.18 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.01%. This week's rate is 0.13 percentage points lower than the 52-week average. This is the lowest rate for the 30-year fixed mortgage since late October.
  • The benchmark 15-year fixed-rate mortgage fell to 3.15% from 3.21%.
  • The benchmark 30-year fixed-rate jumbo mortgage fell to 3.77% from 3.83%.
  • The benchmark 5/1 adjustable-rate mortgage fell to 3.21% from 3.3%.

Weekly national mortgage survey

Results of's Feb. 3, 2016, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed15-year fixed5-year ARM
This week's rate:3.88%3.15%3.21%
Change from last week:-0.06-0.06-0.09
Monthly payment:$776.36$1,151.40$714.47
Change from last week:-$5.68-$4.80-$8.16

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Mortgage analysis

How low can rates go?

It's not really clear whether mortgage rates will bottom out anytime soon, says Michael Becker, branch manager at Sierra Pacific Mortgage in White Marsh, Maryland.

"To say something like that, you run the risk of somebody waiting and missing out on a good deal and rates going up," he says.

There's likely to be some volatility ahead, but a dramatic spike in rates isn't imminent, adds Pava Leyrer, chief operating officer for Northern Mortgage Services in Grandville, Michigan.

"I really think you're going to see a gradual rocking back and forth," she says.

Mortgage applications fell 2.6% last week compared with the previous week, according to the Mortgage Bankers Association's weekly survey. Last week's results include an adjustment for the Martin Luther King Jr. holiday. The unadjusted purchase index rose 11% from the week before and 17% compared with the same week in 2015.

Separate data from CoreLogic show that national home prices were up 0.8% from November 2015 to December 2015 and 6.3% over the year. Additionally, prices are expected to increase 5.4% from December 2015 to December 2016.

If you're prepping to step into the housing market, pay attention to the details and educate yourself on the homebuying process, Leyrer advises.

"I would just absolutely make myself aware of the circumstances that affect me," she says.

And if you're already ready to shop for a mortgage, find the best deal today by searching


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