Mortgage Rates Hit Lowest Levels of Year

By Kyle Chezum Updated on 5/6/2011

 

Interest rates on 30 year and 15 year fixed rate mortgages are typically some of the lowest available in the marketplace.  The 30 year fixed rate mortgage is considered the standard home purchase mortgage, while the 15 year fixed rate mortgage is considered the standard refinance loan.  Tracking these rates is a good way to get a feel for what an entry-level, introductory mortgage or refinance would cost.  Today, rates on 30 year fixed rate mortgages dropped to their lowest level of the year at just 4.71%.

That rates are now lower than they've been since December is startling enough.  But equally startling is the range of the decrease.  Rates dropped almost a whole percentage point, down from around 4.78% and 4.81% in the weeks prior.

Mortgage rates hit their lowest point of the past 40 years in November of last year when they dipped to 4.17%, an unthinkable dip.  At the time, refinance activity skyrocketed but home sales didn't, due to a host of other factors that made new financing difficult to secure.

The present dip carries many of the same characteristics.  Refinancing is up, according to the Mortgage Bankers Association, by a whole 4.0% from the week before.  Home purchase mortgage applications remain unseasonably low.  Time will tell if demand will increase as mortgage rates continue to drop.