Mortgage rates fall into the new year

Mortgage rates edged downward this week. Finally.

Before this week, mortgage rates had gone up nine weeks in a row. They hadn’t fallen from one week to the next since late September. From the end of September until the end of 2016, the 30-year fixed-rate mortgage climbed a little more than three-quarters of a percentage point.

But they fell this week.

Mortgage rates this week

The benchmark 30-year fixed-rate mortgage fell this week to 4.21 percent from 4.32 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.11 percent. Four weeks ago, the rate was 4.15 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.28 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.79 percent. This week’s rate is 0.42 percentage points higher than the 52-week average.

■ The benchmark 15-year fixed-rate mortgage fell to 3.45 percent from 3.57 percent.

■ The benchmark 5/1 adjustable-rate mortgage fell to 3.50 percent from 3.57 percent.

■ The benchmark 30-year fixed-rate jumbo mortgage fell to 4.28 percent from 4.37 percent.

Reason for the fall

As for the reason that mortgage rates fell — well, it had to happen sometime.

“Because everything that goes up too much …” says Michael Moskowitz, president of Equity Now, a mortgage bank in New York City. “You know, people are beginning to doubt. People are looking at China, people are looking at Europe. And they’re thinking, although the United States is doing very well, maybe the world is still not doing well and maybe the economy won’t be overheated. It will just be a little better.”

Mortgage rates began rising a month before the election, but slowly. They jumped almost half a percentage point in the two weeks after the election, then resumed a more gradual upward path.

Many observers attributed that post-election surge in mortgage rates to investors’ belief that the Republican-controlled Congress will spend more freely with a Republican in the White House, providing long-delayed stimulus to the economy.

What about refinancing?

The streak of rising mortgage rates has ended. If you want to reduce your monthly mortgage payment, it’s too late to refinance if you have a mortgage rate of 4.5 percent or less. (Or it’s too early to refinance if rates continue to fall.) But cutting the monthly house payment isn’t the only reason to refinance.

“If you need to cash out, if you need money for some purpose — a business investment, or if you have 18 percent credit cards — it pays to refinance,” Moskowitz says. Or maybe get a home equity line of credit for that purpose.

Is it possible that mortgage rates will go down again — for two weeks in a row?

In this week’s Rate Trend Index, 36 percent of mortgage experts predicted that rates will fall over the next week.

Another 36 percent think rates will stay about the same.