The borrowing cost on 30-year mortgages, the most widely held type of USA home loan, averaged 3.97 percent in the week ended April 20, the lowest since 3.94 percent in the November 17 week.
Rates for mortgages are in a constant state of flux, but they remain low by historical standards. In fact, this morning's survey of lenders was a split decision: many held firm, while some moved their pricing higher.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that the experts it surveyed were nearly evenly divided on where rates are headed in the coming week.
The decrease in mortgage rates may encourage homeowners to refinance in the short term as buyers take advantage of lower borrowing costs.
The average rate on a 5/1 ARM is 3.15 percent, ticking up 3 basis points from a week ago.
Meanwhile, despite the drop in rates, mortgage applications were down last week, according to the latest data from the Mortgage Bankers Association.
These types of loans are best for those who expect to sell or refinance before the first or second adjustment.
After touching the highest level since June last week, mortgage applications to buy a home fell 3.4% w/o/w and are now down 1.1% y/o/y as we are deep into the important spring time period where about half of all the years transactions take place.
The 5/1 ARM interest rates at Commerce are 3.250% with a starting April of 3.672% which will change as interest rates adjust.
Securing a mortgage used to be a much more expensive proposition.
According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending April 14, 2017, USA mortgage applications decreased 1.8 percent from one week earlier. The seasonally adjusted purchase index decreased by 3% compared with the week ended April 7.