Fixed mortgage rates fell for a third week in a row as oil prices dropped.
The benchmark 30-year, fixed-rate mortgage fell 5 basis points, to 6.55 percent, 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 0.41 discount and origination points. One year ago, the mortgage index was 6.5 percent; four weeks ago, it was 6.74 percent.
The benchmark 15-year fixed-rate mortgage fell 5 basis points, to 6.09 percent, and the 30-year, fixed-rate jumbo, for larger loans, dropped 9 basis points, to 7.52 percent. The benchmark 5/1 adjustable-rate mortgage went the other way, rising 2 basis points, to 6.29 percent.
It was good news for mortgage shoppers when Hurricane Gustav didn’t significantly damage oil and natural gas facilities in the Gulf of Mexico. Most production had been halted just in case, and the federal government pledged to release oil from emergency reserves to cushion the disruption. Oil prices have been on the decline for the last month anyway, as global demand for energy seems to be dropping as a result of the economic slowdown.
Put all those things together and you get falling oil prices. Volatility calming
In the last couple of weeks, there’s been a remarkable change in the mortgage market: Rates aren’t swinging up and down as much as they had done most of this year. Especially in the spring, it wasn’t uncommon for rates to bounce like an airplane in a thunderstorm.
They sometimes moved a quarter of a percentage point in just a few minutes. In business lingo, rates were volatile.
Rates have been calmer for the last week and a half, so fewer borrowers have been receiving urgent phone calls from their mortgage brokers, urging them to lock immediately before rates bounce back up.