Mortgage rates dropped on Monday after former Treasury Secretary Larry Summers withdrew his name from consideration for Federal Reserve Chairman.
The average rate for a 30-year fixed mortgage fell to 4.38%, down 11 basis points from 4.49% last week, real estate data services provider Zillow reports. The rate dropped dramatically on Monday – from 4.49% to 4.44% – on the news that Summers had withdrawn his name from the Fed Chair hat.
Summers, who was President Obama's pick for the Fed Chair position, withdrew under intense pressure from liberal Democrats, women's groups and other advocacy organizations that opposed his nomination.
In a letter to the president, Summers cited political obstacles in his path to Senate confirmation as the reason for withdrawing.
‘I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery,’ Summers wrote.
That leaves two other candidates for the post – Fed Vice Chairman Janet L. Yellen and former Fed Vice Chairman Don Kohn – however, with Summers now out of the running, President Obama may decide to pursue a wider range of candidates.
‘[Summer's] decision makes it more likely Fed Vice Chair Janet Yellen will take the role and continue Ben Bernanke's fairly accommodative monetary policy that has helped keep rates low,’ says Erin Lantz, director of Zillow Mortgage Marketplace, adding that Fed's announcement and press conference on Wednesday regarding its plans to start winding down the stimulus program will likely also impact the markets.
The average rate for a 15-year fixed home loan is currently 3.36%, while the rate for a 5-1 adjustable-rate mortgage is 3.05%, according to Zillow.
To view current rates for 30-year fixed mortgages by state, click here.