Mortgage Rates Drop to 4.29%

Mortgage rates slipped lower this week, with the benchmark 30-year fixed mortgage rate dropping to 4.29 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.24 discount and origination points.

The larger jumbo 30-year fixed slid to 4.22 percent and the average 15-year fixed mortgage rate stepped down to 3.49 percent. Adjustable mortgage rates also declined, with the 5-year ARM sliding to 3.44 percent and the 7-year ARM to 3.68 percent.  

Mortgage rates retreated to one-month lows, continuing declines that began with the Federal Reserve’s quarter-point interest rate hike. The Fed rate hike and dropping oil prices help keep a lid on inflation, which coupled with the suddenly wobbly stock market, are good news for long-term bonds and mortgage rates. Mortgage rates are closely related to yields on long-term government bonds. If investors continue to exhibit skepticism about the likelihood of new fiscal stimulus measures, this will produce a flight to quality that continues to benefit mortgage borrowers. If animal spirits return, or we get details from the administration that investors cheer, mortgage rates will quickly reverse course.