Mortgage rates spiked in March and have fallen slowly since then. Rates on 30-year, fixed-rate mortgages have fallen eight of the last nine weeks, including this week.
The benchmark 30-year fixed-rate mortgage fell 6 basis points to 5.72 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 0.31 discount and origination points. One year ago, the mortgage index was 6.35 percent. The 15-year fixed rate mortgage, popular for refinancing, declined from 5.35 percent to 5.3 percent.
...The Fed certainly sent an inflation-fighting message this week when it released the minutes of the May 3 meeting of the Federal Open Market Committee. That's the panel that decides interest rate policy, and it raised the federal funds rate by one-quarter of a percentage point at that meeting. The Fed had telegraphed its intentions, and the rate hike was no surprise at all.
...In other words, more short-term rate hikes are coming. That message reassured bond investors, and kept bond yields and interest rates down. They believe that higher short-term rates will keep the economy from overheating, inflation will remain shackled, and long-term interest rates will remain low.
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