Dec 18, 2008

Benchmark mortgage rate at 4-year low

Here is an article by Holden Lewis of

For a while Wednesday morning, people were getting conforming mortgages at less than 5 percent.

Rates didn't stay that low all day. By afternoon, they had gone up about a quarter of a percentage point. Dan Green, mortgage planner with the Mobium Group in Cincinnati, told his Twitter followers: "Today reminds us: The bird in the bush is ever-elusive. Lock mortgage rates when you have the chance."

There's reason to believe that borrowers will continue to have chances. The Federal Reserve made it clear Tuesday that it intends to push mortgage rates down and keep them low for a long time.

Bankrate's weekly rate survey didn't register as dramatic a decline in rates, for reasons that will be explained shortly. The benchmark 30-year fixed-rate mortgage fell 38 basis points, to 5.42 percent, according to the national survey of large lenders. One year ago, the mortgage index was 6.21 percent; four weeks ago, it was 6.33 percent.

The benchmark 15-year fixed-rate mortgage fell 21 basis points, to 5.3 percent. The benchmark 5/1 adjustable-rate mortgage fell 33 basis points, to 5.84 percent.

Bankrate has been surveying mortgage rates weekly since 1985. For the benchmark 30-year mortgage, the all-time low was set June 11, 2003, at 5.28 percent. This week it's 5.42 percent. In 23 years of weekly Bankrate surveys, the benchmark rate has been below 5.42 percent eight times. The last time it was lower than 5.42 percent was March 17, 2004, when it was 5.41 percent.

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