I'm Greg McBride with Bankrate.com and here is your weekly look at mortgage rates.
Mortgage rates plummeted this week as the Federal Reserve's latest stimulus effort – QE3 – kicked off. The benchmark 30-year fixed mortgage rate fell from 3.7 percent last week to 3.55 percent this week. On the 15-year fixed rate mortgage, the average rate pulled back to 2.88 percent, while on the larger jumbo 30-year fixed mortgage, the average rate plunged to 4.19 percent. All are record lows.
Adjustable mortgage rates moved to record lows also, albeit more modestly. The popular 5/1 ARM, which offers a fixed rate for the first 5 years before becoming adjustable every year thereafter, inched lower to 2.68 percent, while the 7-year and 10-year ARMs settled at 2.85 percent and 3.29 percent, respectively.
With the Fed's efforts focused on buying mortgage-backed bonds, they are aiming squarely at mortgage rates. The hope of the Fed is to juice the economy by reducing mortgage rates further, spurring home purchases and refinancings. The part about reducing rates further is certainly working and it will no doubt spur refinancings and pull forward some home purchases. Will this magically jump start the economy? We'll see, but you can color me skeptical.
Nevertheless, its still important to shop around for the best mortgage deal. To find the lowest mortgage rates in your area, use the free search engine at Bankrate.com.
I'm Greg McBride.