Mortgage Rates Drop Despite Higher Interest Rates

Though short-term interest rates were increased by the Federal Open Market Committee, mortgage rates fell for their sixth week in a row.

The Federal Reserve yesterday continued its measured pace of raising short-term interest rates. This is the 8th time in a row that they have been raised.

The average 30-year fixed rate mortgage fell to 5.81% from 5.85%. This is the lowest it has been since February.

According to a press release from Bankrate, Inc., the 30-year fixed rate mortgages in this week’s survey had an average of 0.34 discount and origination points.

The popular 15-year fixed rate mortgage fell to 5.38% from 5.42%.

The average rate for the jumbo 30-year fixed rate mortgage fell below 6%.

As Bankrate’s press release explains, mortgage rates are closely related to yields on long-term government bonds and move independently of the Federal Reserve’s actions. This week was yet another illustration of that little-known fact.

The average 30-year fixed rate mortgage has dropped to 5.81% from 6.3% since the Fed started raising interest rates in June.

The Fed remains concerned about inflation, but bond investors are more worried about the slowing down of the economy. Economic growth hit its slowest in two years in the first quarter of this year.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.