Mortgage Rates Retreat

Good news for prospective homebuyers: According to Bankrate.com’s weekly national survey, mortgage rates moved lower after reaching a 4-month high last week, with the benchmark 30-year fixed mortgage rate retreating to 3.60 percent this week. The average 30-year fixed mortgage has an average of 0.36 discount and origination points.

As the positive energy generated by the fiscal cliff deal begins to wear off, mortgage rates are now sliding back after a brief run-up to start the year, Bankrate explains. Although recent economic data has been pretty positive, the pace of the decline in bond yields and mortgage rates will likely pick up as nervousness about the debt ceiling debate increases. Mortgage rates are closely related to yields on long-term government bonds.

According to Bankrate, the average 15-year fixed mortgage rate pulled back to 2.89 percent and the larger jumbo 30-year mortgage dropped to 4.04 percent. Adjustable rate mortgages were lower across the board, with the popular 5-year ARM sliding to 2.74 percent and the 7-year ARM sinking to 2.88 percent.

By the way, the last time mortgage rates were above 5 percent was April 2011. At the time, the average 30-year fixed rate was 5.07 percent, meaning a $200,000 loan would have carried a monthly payment of $1,082.22. With the average rate now 3.60 percent, the monthly payment for the same size loan would be $909.29, a difference of $173 per month for anyone refinancing now.

I encourage you to move forward with your plans to buy a home while these phenomenal interest rates are still in play. As the economy continues to gradually improve, rates will rise. For a full analysis of this week's move in mortgage rates, you can visit http://www.bankrate.com/mortgagerates.