Mortgages Tumble near Record Lows Again

Mortgage rates tumbled this week as investors awaited moves by the world’s major central banks. The drop put rates near record lows again and ended a four-week streak of increases, giving borrowers some extra time to grab a low rate.

The benchmark 30-year fixed-rate mortgage fell to 3.8% from 3.91%, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.4 discount and origination points. One year ago, the mortgage index stood at 4.37%; four weeks ago, it was 3.77%.

The benchmark 15-year fixed-rate mortgage fell to 3.03% from 3.12%. The benchmark 5/1 adjustable-rate mortgage fell to 2.8% from 2.9%.

Weekly national mortgage survey

Results of Bankrate.com’s Aug. 29, 2012, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed 15-year fixed 5-year ARM

This week’s rate: 3.8% 3.03% 2.8%

Change from last week: -0.11 -0.09 -0.1

Monthly payment: $768.83 $1,141.84 $677.98

Change from last week: -$10.37 -$7.17 -$8.80

Big event this week may affect rates

Helping rates this week was speculation that Federal Reserve Chairman Ben Bernanke may announce plans for additional monetary stimulus at an annual conference scheduled for Friday in Jackson Hole, Wyo.

The rumors started after the Federal Open Market Committee’s latest meeting minutes were released. In the minutes, some Fed members indicated they support additional stimulus, including additional bond purchases. Two years ago, the Fed announced its second bond-buying program, QE2, during this same annual summit.

Even if a supposed QE3 is not announced this week, Bernanke’s speech may still affect the direction of mortgage rates in coming days, says Michael Becker, a mortgage banker at WCS Funding in Baltimore.

“We are in a strange market these days where statements from central bank heads move markets more than economic data,” Becker says. “So it’s hard to tell where rates are going, but if you’re ready to lock, I’d say do it.”

Rumors aside, it’s unlikely Bernanke will announce additional help for the economy Friday, analysts say. That’s partly because recent reports show the U.S. economy and the housing market have been improving — slowly but surely. The improvements make it more challenging to persuade Fed members who are against additional stimulus that more help is needed.