Mortgage Rates Drop for First Time in 5 Weeks

After weeks of seeing mortgage rates take off since the government stopped buying mortgage-backed securities last month, mortgage rates have fallen for the first time this week. Reuters reported today that interest rates on 30-year fixed-rate mortgages averaged 5.07% for the week ending April 15, down from 5.21% the week before. Last week’s rate was the highest it was in eight months, according to Reuters.

And it wasn’t just 30-year mortgages experiencing this decline. Fifteen-year mortgages went from 4.52% last week to 4.40% this week, according to Freddie Mac’s weekly survey. (Last year, a 15-year mortgage averaged 4.48%.) One-year adjustable-rate mortgages (ARMs) were at 4.13% last week, compared to 4.14% the previous week. The 5/1 ARM rate — for mortgages with a fixed rate for five years and an adjustable rate the following year — saw a precipitous drop from 4.25% last week to 4.08% this week. Last year, rates for one-year and 5/1 ARMs were at 4.91% and 4.88%, respectively.

The rise in interest rates during those four weeks had an impact on the housing market. The Mortgage Bankers Association reported on Wednesday that mortgage applications fell for a second straight week. With mortgage rates starting to go down, mortgage brokers will see a greater influx of paperwork coming in from a growing number of applicants.

While prospective homeowners may not be able to get that mortgage at record lows (below 5%) that were offered earlier this year, they may see homeownership within their reach.

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