Mortgage rates decreased for a second week in a row this week, with the average rate for a 30-year fixed mortgage dropping to 4.17% as of Wednesday, according to Zillow's Mortgage Marketplace. That's a drop of 21 basis points from the week prior.
What's more, the rate fell dramatically from earlier in the week – as of Monday, it was 4.24%.
In the past two weeks, the average rate for a 30-year fixed rate mortgage dropped a total of 32 basis points, according to Zillow.
‘Rates plunged to levels not seen since mid June after the Federal Reserve surprised many by announcing plans to wait for signs of stronger economic growth before scaling back its stimulus program,’ says Erin Lantz, director of mortgages at Zillow. ‘Next week, we expect rates to remain fairly flat as markets continue to digest the Fed's announcement and look for particularly strong or surprisingly weak economic data before making major changes.’
The average rate for a 15-year fixed home loan as of Wednesday was 3.19%, while the rate for a 5-1 adjustable-rate mortgage (ARM) was 2.96%, according to data culled from Zillow's Mortgage Marketplace – which the company points out is not a survey or a marketing tool.
Refinance activity and origination volume has been increasing since rates started to decline two weeks ago. According to the Mortgage Bankers Association's weekly Mortgage Applications Survey, mortgage application volume increased 5.5% on an adjusted basis during the week ending Sept. 20, compared to the week prior, while refinance volume increased 5%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.62% from 4.75%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.66% from 4.83%.
For the week ending Sept. 13, application volume increased 11.2%, on an adjusted basis, compared to the week prior, while refinancing volume increased about 18%. That week, the average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balance ($417,000 or less) was 4.75%, down from 4.8% the week prior.