Bankrate: Mortgage Rates Come Full Circle

Mortgage rates had an eventful week but ended up right back where they started. The average 30-year fixed rate is now 6.32 percent, little changed from 6.31 percent one week ago. According to Bankrate.com's weekly national survey of large lenders, the 30- year fixed rate mortgages had an average of 0.26 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing remained at 6.02 percent. On larger loans, the average jumbo 30-year fixed rate slid to 6.56 percent. Adjustable rate mortgages were mixed. The average 5/1 adjustable rate mortgage increased to 6.16 percent and the average one-year ARM inched lower to 5.91 percent.

Mortgage rates surged following the Nov. 3 employment report that showed strong upward revisions to job growth in August and September. Investors sold bonds in a flurry, pushing bond prices lower and bond yields higher. Mortgage rates are closely related to yields on long-term government bonds. But both bond yields and mortgage rates have fallen back in recent days following a number of corporate bond issuances this week.

Fixed mortgage rates are sharply lower than four months ago, when rates were flirting with 7 percent. At that time, the average 30-year fixed mortgage rate peaked at 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.32 percent, the same loan originated today would carry a monthly payment of $1,023.46. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

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