Bankrate: Mortgage Rates Stay Rangebound

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RISMEDIA, May 18, 2007-Mortgage rates increased slightly this week, with the average 30-year fixed mortgage rate rising to 6.32%. According to Bankrate.com’s weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.26 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, rose to 6.05%. With larger loans, the average jumbo 30-year fixed rate nudged higher to 6.56%. On adjustable rate mortgages, the average 5/1 ARM jumped up to 6.24% while the average one-year ARM held at 6.05%. The average 30-year fixed mortgage rate is at the same point where it rested on Valentine’s Day, at 6.32%. In the three months since, mortgage rates have remained in a very narrow range owing to a static interest rate environment. Even the release of several inflation indicators, plus the latest data on retail sales, the housing market, and a Federal Open Market Committee meeting in the past seven days barely fazed mortgage rates and Treasury yields. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates. At the time, the average 30-year fixed mortgage rate peaked at 6.93%, and a $165,000 loan carried a monthly payment of $1,090.00. With the average 30-year fixed rate now 6.32%, the same loan originated today would carry a monthly payment of $1,023.46. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

SURVEY RESULTS

30-year fixed: 6.32% — up from 6.29% last week (avg. points: 0.26)
15-year fixed: 6.05% — up from 6% last week (avg. points: 0.27)
5/1 ARM: 6.24% — up from 6.16% last week (avg. points: 0.26)

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 more information: http://www.bankrate.com/mortgagerates.

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