Mortgage Rates Fall to 19-month Low

Falling mortgage rates are raising the possibilities for potential homebuyers.

Current rate borrowers have been quoted an average interest rate of 3.58% on Zillow’s Mortgage Marketplace in the week that ended Tuesday, down from 3.72% last week.

The rates for other mortgages are down as well. Borrowers on Zillow’s Mortgage Marketplace have been quoted an average interest rate of 2.88% for a 15-year fixed-rate mortgage. That’s down from 2.98 last week, and the average interest rate for a 5/1 adjustable-rate mortgage hit a lower 2.71%, down from 2.83% last week.

Fears of slowing global growth, weak equity markets, falling oil prices and low market activity over the New Year's holiday generally have caused rates to fall during the last week. "Given the recent history of markets largely overlooking strong U.S. data, we expect rates to remain flat or fall slightly this week on international news,” said Erin Lantz, Zillow’s vice president of mortgages.

The rates drops on Zillow’s Mortgage Marketplace echo those in the latest Freddie Mac Primary Mortgage Market survey. It showed that the 30-year FRM averaged 3.73% for the week ended Jan. 8, down from last week’s 3.87%. By contrast, and according to Freddie’s, the 30-year FRM averaged 4.51% during the same time period in 2014, and the 15-year, fixed-rate mortgage dropped to 3.05% from 3.15% a week before.

Freddie also reported that the 5-year Treasury-indexed hybrid adjustable-rate mortgage moved down from 3.01% last week to 2.98%.