Mortgage rates stall, ARMs fall off

Mortgage rates remained largely unchanged this week, and borrowers continue to desert adjustable-rate loans.

The benchmark 30-year fixed-rate mortgage rose 1 basis point, to 6.28 percent, the Bankrate.com national survey of large lenders shows. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.26 discount and origination points. One year ago, the mortgage index was 6.67 percent; four weeks ago, it was 6.25 percent.

The benchmark 15-year, fixed-rate mortgage rose 1 basis point, to 6 percent. The benchmark 5/1 adjustable-rate mortgage rose 1 basis point, to 6.13 percent.

There wasn't any economic news this week disturbed the slumber of 30-year mortgage rates. In the last month, the 30-year rate has varied from a low of 6.25 percent to a high of 6.31 percent.

A couple of alarms are set for the next week that might rouse mortgage rates. The employment report for April will be released Friday. A surprisingly strong showing could send mortgage rates higher, and a weaker-than-expected result could cause mortgage rates to drop. On May 9, the Federal Reserve's rate-setting committee met and left the Fed funds rate unchanged at 5.25 percent. The panel is expected to leave short-term interest rates alone.

Mortgage borrowers have been making their own judgments lately about adjustable-rate loans: They have decided they don't like them all that much. Last week, 17.9 percent of applicants requested adjustable-rate mortgages. The ARM share hasn't been that low since 2003.

Back then, rates on 30-year, fixed-rate mortgages were plummeting to the lowest levels in generations, and bottomed out at 5.28 percent on June 11, 2003. With fixed rates so low, it's no wonder borrowers were ignoring adjustables. In the first half of 2003, fewer than 15 percent of borrowers were getting ARMs.

Tip: Since the beginning of 2000, the average benchmark 30-year rate has been 6.53 percent.