Reply #26: Mortgage rates continue mysterious fall

[54anickel]

With oil near $50 and growth surging, the pressure is on for higher long-term rates. Yet 15- and 30-year mortgages are getting cheaper, confounding the experts.

http://moneycentral.msn.com/content/Banking/Homefinancing/P95626.asp

The rates on long-term mortgages have fallen for the third week in a row, even as the one-year adjustable was unchanged.

The benchmark 30-year fixed-rate mortgage fell 5 basis points to 5.71%, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.32 discount and origination points. One year ago, the mortgage index was 5.67%.

The benchmark 15-year fixed-rate mortgage fell 4 basis points to 5.17%. The benchmark one-year adjustable-rate mortgage remained 4.44%.

Economists expect rates across the board to climb. They're not sure why long-term rates have been going down instead of up.

"It's surprising that with oil back at $50 a barrel, the weak dollar and growth above trend, mortgage rates are around 5.75%," says David Berson, chief economist for the National Association of Home Builders. He offers two theories: Either financial markets are predicting much slower economic growth than the economists are predicting, or financial markets believe the Federal Reserve will continue to keep inflation well under control. HA! Comedians all over the articles today. :evilgrin:

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