Bankrate: Mortgage Rates Largely Unchanged as Fed Stays Course

NEW YORK,  -- Mortgage rates inched lower this week, with the benchmark 30-year fixed mortgage rate dipping to 4.33 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.35 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 nosed higher to 3.44 percent, while the larger jumbo 30-year fixed mortgage rate slid to 4.38 percent. Adjustable rate mortgages were mostly higher, with the 3-year ARM rising to 3.27 percent and the 7-year ARM drifting upward to 3.63 percent.     

Mortgage rates remain at attractive levels despite the ongoing tapering of bond stimulus by the Federal Reserve, defying expectations for rising rates this year. How is this? One reason is the choppy economic performance to start 2014, including a notable economic contraction in the first three months of the year. But a second contributor is the fact that, although the Fed is buying fewer bonds, the ongoing stimulus efforts of the European Central Bank have driven interest rates so low on the other side of the Atlantic that many overseas investors have piled into U.S. Treasuries, filling the void left by the Fed and keeping both bond yields and mortgage rates at low levels. 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 4.33 percent, and the monthly payment for the same size loan would be $993.27, a savings of nearly $43 per month for anyone that waited.

SURVEY RESULTS

30-year fixed: 4.33% -- down from 4.34% last week (avg. points: 0.35)
15-year fixed: 3.44% -- up from 3.43% last week (avg. points: 0.19)
5/1 ARM: 3.37% -- unchanged from last week (avg. points: 0.22)