Bankrate: Mortgage Rates Fall to 11-Month Low

NEW YORK, May 29, 2014 /PRNewswire/ -- Mortgage rates retreated for the fifth week in a row, and seventh time in the past eight weeks, with the benchmark 30-year fixed mortgage rate pulling back to 4.25 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.34 discount and origination points.

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.

The average 15-year fixed mortgage rate slumped to 3.35 percent, while the larger jumbo 30-year fixed mortgage rate stepped back to 4.29 percent. Adjustable rate mortgages were mixed, with the 5-year ARM rising to 3.24 percent, the 7-year ARM holding at 3.45 percent and the 10-year ARM sliding further to 3.77 percent.    

One year ago mortgage rates were on the rise after then-Fed Chairman Ben Bernanke hinted at the eventual tapering of Fed stimulus. Now, with the Fed taper well underway and poised to continue, mortgage rates are in the midst of a steady retreat. Why? A number of factors come into play: disappointing U.S. economic growth at the start of 2014; slower growth in emerging markets; the prospect of European stimulus measures; and geopolitical issues around the globe, to name a few. But the bottom line is this - any time investors get nervous, whatever the reason, it is good news for mortgage shoppers. Mortgage rates are closely related to yields on long-term government debt.

As 2013 came to a close, the average 30-year fixed mortgage rate was 4.69 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,036.07. After drifting lower for much of the first five months of 2014, the average rate is now 4.25 percent, and the monthly payment for the same size loan would be $983.88, a savings of nearly $52 per month for anyone that waited.

SURVEY RESULTS

30-year fixed: 4.25% -- down from 4.29% last week (avg. points: 0.34)

15-year fixed: 3.35% -- down from 3.38% last week (avg. points: 0.21)

5/1 ARM: 3.24% -- up from 3.21% last week (avg. points: 0.22)