Bankrate: Mortgage Rates Reverse Course

NEW YORK, Feb. 12 /PRNewswire-FirstCall/ -- Mortgage rates fell sharply from one week ago, with the average 30-year fixed mortgage rate dropping from 5.70 percent to 5.34 percent. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage has an average of 0.37 discount and origination points.

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The average 15-year fixed rate mortgage sank to 5.03 percent and the average jumbo 30-year fixed rate dipped to 6.98 percent. Adjustable rate mortgages were lower also, with the average 1-year ARM pulling back to 5.67 percent and the 5/1 ARM retreating to 5.37 percent.

Mortgage rates plunged after Treasury Secretary Tim Geithner pledged to reduce mortgage rates through an as-yet-to-be-determined housing initiative in the Financial Stability Plan. Increasing skepticism about the economic and financial outlook helped drive benchmark Treasury yields lower, pulling mortgage rates lower as well. These worries outweighed the predominant investor concern of last week, the volume of government debt issuance.

Mortgage rates have dropped as much as the outside temperatures compared to six months ago. Back in August, the average 30-year fixed mortgage rate was 6.74 percent, meaning a $200,000 loan would have carried a monthly payment of $1,295.87. With the average rate now 5.34 percent, the monthly payment for the same size loan would be $1,115.58, a savings of $180 per month for a homeowner refinancing now.

SURVEY RESULTS
30-year fixed: 5.34% -- down from 5.7% last week (avg. points: 0.37)
15-year fixed: 5.03% -- down from 5.31% last week (avg. points: 0.38)
5/1 ARM: 5.37% -- down from 5.5% last week (avg. points: 0.48)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. This week, half of the panelists predict mortgage rates will decline. Only 14 percent forecast an increase in rates over the next 30 to 45 days, while more than one-third, 36 percent, expect rates to remain more or less unchanged.

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