Good news for homebuyers and refinancers: The 30-year fixed-rate mortgage dropped from 4.59 percent to 4.54 percent, according to Bankrate’s weekly survey of large lenders. This week’s decrease breaks a nine-week streak of rate increases.
This week’s rate dip is a reaction to new data showing that inflation is picking up but not at a breakout speed, says Greg McBride, CFA, Bankrate’s chief financial analyst.
“Inflation is a key factor in the yields on long-term bonds, such as mortgage-backed bonds, because it erodes the value of the fixed payments bond investors receive,” McBride says. “The worst fear of bond investors is a rapid increase in inflation.”
Refinance applications hit a speed bump
This week’s rate drop comes on the heels of refinance activity falling to its lowest level since 2008, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. A declining trend in mortgage refinancing is expected, says Joel Kan, Mortgage Bankers Association economist.
“There were just so many people who refinanced back in 2012 to 2014 there are much fewer people who need to refinance today,” Kan says.
Even with this week’s drop in mortgage rates, McBride says it’s not necessarily enough to accelerate refinancing.
“We’d need to see a larger, more sustained pullback to provide any measurable boost to refinancing activity,” he says.
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage fell this week to 4.54 percent from 4.59 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.44 percent. Four weeks ago, the rate was 4.51 percent. The 30-year fixed-rate average for this week is 0.05 percentage points below the 52-week high of 4.59 percent, and is 0.59 percentage points greater than the 52-week low of 3.95 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.33 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.16 percent. This week’s rate is 0.38 percentage points higher than the 52-week average.
- The 15-year fixed-rate mortgage fell to 3.95 percent from 4.00 percent.
- The 5/1 adjustable-rate mortgage rose to 4.04 percent from 4.01 percent.
- The 30-year fixed-rate jumbo mortgage fell to 4.51 percent from 4.53 percent.
At the current 30-year fixed rate, you’ll pay $509.06 each month for every $100,000 you borrow, down from $512.05 last week.
At the current 15-year fixed rate, you’ll pay $737.18 each month for every $100,000 you borrow, down from $739.69 last week.
At the current 5/1 ARM rate, you’ll pay $479.72 each month for every $100,000 you borrow, up from $477.99 last week.
Results of Bankrate.com’s weekly national survey of large lenders conducted March 14, 2018, and the effect on monthly payments for a $165,000 loan:
|Breakdown||30-year fixed||15-year fixed||5-year ARM|
|This week’s rate:||4.54%||3.95%||4.04%|
|Change from last week:||-0.05||-0.05||+0.03|
|Change from last week:||-$4.92||-$4.14||+$2.85|