Mortgage interest rates fell dramatically this week, dipping to a two-month low in one industry study and a three-month low in a separate market survey, as natural disasters devastated the East Asia island nation of Japan, the world's third largest economy.
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Frank Nothaft, Freddie Mac's chief economist, noted, ""With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well. This allowed fixed mortgage rates to drift lower this week.""
According to ""Freddie Mac's weekly study"":http://www.freddiemac.com/pmms/release.html?week=11&year=2011, the average rate for a 30-year fixed mortgage came in at 4.76 percent (0.7 point) for the week ending March 17, 2011. That's down from 4.88 percent last week, and the GSE's lowest 30-year reading since mid-January.
Freddie reported that the 15-year fixed-rate mortgage averaged 3.97 percent (0.7 point) this week. Last week, it was nearly 20 basis points higher at 4.15 percent.
Adjustable-rate mortgages (ARMs) also headed lower in the GSE's survey, with the 5-year ARM dropping sharply
[COLUMN_BREAK]to 3.57 percent (0.6 point), and the 1-year ARM slipping to 3.17 percent (0.6 point).
Freddie Mac's weekly survey is based on data gathered from about 125 lenders nationwide. The results of a separate study conducted by Bankrate are derived from information provided by the top 10 banks and thrifts in the top 10 U.S. markets and showed the same downward trend.
According to ""Bankrate's survey"":http://www.bankrate.com/finance/mortgages/japan-crisis-fed-send-mortgage-rates-down.aspx?ic_id=tsHed1, the benchmark conforming 30-year fixed mortgage rate fell to 4.91 percent (0.38 point) this week, down from 5.04 percent.
The tracking firm says this week marked the first time the benchmark 30-year rate dropped below the 5 percent mark in its study in nearly two months.
""While mortgage rates had been lower in three of the past four weeks owing to concerns about Middle East tensions and the potentially negative economic consequences of higher oil prices, it was the unfolding tragedy in Japan that produced this week's movement,"" Bankrate explained in its report.
The average 15-year fixed mortgage nose-dived from 4.32 percent to 4.12 percent (0.38 point) in Bankrate's survey, while the larger jumbo 30-year fixed rate retreated from 5.58 percent to 5.46 percent.
Adjustable rate mortgages were mostly lower also, with the average 5-year ARM sinking to 3.74 percent and the 7-year ARM pulling back to 4.10 percent.
""The lower rates presented an opportunity, however brief, for home-loan borrowers, given a general sense that rates should be on the rise as the U.S. economy improves,"" noted Marcie Geffner, of Bankrate.com.