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Mortgage Rates Continue to Sink

ratesFixed mortgage rates chased Treasury yields to a new 2014 low this week as falling oil prices and economic worries overseas made headlines.

According to figures released Thursday by Freddie Mac, the 30-year fixed mortgage rate averaged 3.80 percent (0.6 point) for the week ending December 18, down 13 basis points from last week's survey. Last year, the 30-year fixed-rate mortgage (FRM) averaged 4.47 percent.

"Mortgage rates fell along with 10-year Treasury yields, which closed at their lowest level since May 2013," said Frank Nothaft, VP and chief economist at Freddie Mac.

The 15-year FRM this week averaged 3.09 percent (0.6 point), dropping 11 basis points week-over-week.

Adjustable rates also tumbled this week, averaging 2.95 percent (0.5 point) for the 5-year hybrid adjustable-rate mortgage (ARM) and 2.38 percent (0.4 point) for the 1-year ARM.

Meanwhile, finance site Bankrate.com recorded the 30-year fixed rate at an average 3.94 percent, the lowest level in 19 months "as the global economic jitters and plunging oil prices of recent weeks culminated in a Russian currency crisis" and drove investors to Treasuries.

The 15-year fixed, meanwhile, was down to 3.21 percent, matching the 5/1 ARM.

While discussions at the Federal Reserve to raise short-term interest rates had U.S. financial markets nervous on Wednesday, the central bank made clear that any increase won't happen for at least a few more months.

"This, along with the ongoing concerns surrounding the global economy, should keep mortgage rates in check as we move into the New Year," Bankrate said.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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