Mortgage Rates Recede After Dramatic Jump

Following last week's ""dramatic spike"":http://dsnews.comarticles/fixed-rates-skyrocket-amid-talks-of-fed-tapering-for-bond-purchases-2013-06-27, mortgage rates reversed course this week, according to surveys from ""Freddie Mac"":http://www.freddiemac.com/ and ""Bankrate.com"":http://www.bankrate.com/.

[IMAGE]

Freddie Mac's Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage (FRM) averaging 4.29 percent (0.7 point) for the week ending July 3, down from last week's two-year high of 4.46 percent. Last year at this time, the 30-year FRM averaged 3.62 percent.

The 15-year FRM averaged 3.39 percent (0.7 percent), down from 3.50 percent the previous week.

[COLUMN_BREAK]

Adjustable rates, meanwhile, stayed more or less on track. The 5-year Treasury-index hybrid adjustable-rate mortgage (ARM) averaged 3.10 percent (0.7 point)--up from 3.08 percent--while the 1-year ARM averaged 2.66 percent (0.4 point), unchanged from the last survey.

""Fixed mortgage rates fell over the holiday week as market concerns over the timing of the Federal Reserve's pullback in bond purchases eased somewhat,"" said Frank Nothaft, VP and chief economist for Freddie Mac. ""Rates are still low by historical standards and should continue to aid in housing affordability and the ongoing recovery of the housing market.""

Bankrate's weekly national survey showed similar trends, with the 30-year fixed falling to 4.48 percent and the 15-year fixed dropping to 3.62 percent. Meanwhile, the 5/1 ARM rose to 3.48 percent.

While rates did ease, they're still a far cry from where they were just two months ago.

""As recently as May 1st, the average 30-year fixed mortgage rate was 3.52 percent. At that time, a $200,000 loan would have carried a monthly payment of $900.32. With the average rate currently at 4.48 percent, the monthly payment for the same size loan would be $1,011, a difference of $111 per month for anyone that waited just a little too long,"" Bankrate said in a release.