Mortgage rates hit year's low point

After drifting downward for more than five months, mortgage rates have hit the lowest point all year, and that has ignited a refinancing boomlet.

The benchmark 30-year, fixed-rate mortgage fell for the sixth week in a row, this time by 9 basis points, to 6.08 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.25 discount and origination points.

The 15-year, fixed-rate mortgage fell 8 basis points to 5.83 percent. The 5/1 adjustable-rate mortgage tumbled 6 basis points to 5.95 percent.

That put the 30-year rate at its lowest level since Oct. 5, 2005, when it was 6.07 percent.

Mortgage rates have drifted generally downward for more than five months since they hit the year's high on June 28, when the 30-year fixed stood at 6.93 percent.

Weekly national mortgage survey

Results of Bankrate.com's Dec. 6, 2006, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

The investors whose trades set mortgage rates have been pushing rates down, chiefly on the belief that the higher gas prices and the cooling of the housing market were slowing the economy down enough to keep inflation tame. That would, in turn, be enough to spark rate cuts from the Fed.

Consumers have noticed the lower rates -- not enough to re-ignite the sagging housing market, but enough to get those who wanted refinancing into their local mortgage broker's office.

The Mortgage Bankers Association's weekly survey of mortgage applications, released Wednesday, showed a seasonally adjusted increase of 8.1 percent. Its Refinance Index rose even more strongly: to 13.7 percent, up from the previous week.

11:11 AM - Dec. 8, 2006 - comments {0} - post comment
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