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FOR IMMEDIATE RELEASE
Bankrate: Mortgage Rates Rise Amid Fed Speculation
NEW YORK, N.Y. -- Jan. 29, 2004 -- Mortgage rates increased slightly on speculation about this week’s Federal Open Market Committee meeting and the future course of interest rates. The average 30-year fixed rate mortgage climbed to 5.72 percent from 5.67 percent, according to Bankrate.com's weekly national survey of large lenders. The mortgages in this week's survey had an average of 0.34 discount and origination points. The 15-year fixed rate mortgage popular for refinancing rebounded above the 5 percent barrier, rising from 4.99 percent to 5.02 percent. The jumbo 30-year fixed rate mortgage climbed 2 basis points to 5.95 percent, and the one-year adjustable rate mortgage fell 3 basis points to 3.65 percent. A basis point is one one-hundredth of one percentage point. Speculation about the timing of future interest rate hikes leading up to the FOMC meeting Jan. 27-28 caused mortgage rates to eke out a small increase. Speculation continued following the Jan. 28 Fed announcement, which no longer contained the highly scrutinized “for a considerable period” phrase. The prospect of interest rate hikes makes bond investors nervous, with money often flowing out of the longest-term bonds. Mortgage rates are closely related to the yields on long-term government bonds. The change in the Fed's wording was enough to spook the bond investors. In the minutes following the Fed announcement, the yield on the 10-year Treasury note spiked upward from about 4.06 percent to about 4.18 percent. Monthly mortgage payments remain enticing to home buyers and refinancers alike. The monthly payment on a $165,000 loan with the average 30-year fixed rate mortgage at 5.72 percent is $959.75. Six months ago when the average rate was 6.26 percent, the same size loan carried a
monthly payment of $1,017.01. The $57.26 difference in monthly payments amounts to more than $20,000 over the loan term. SURVEY RESULTS 30-year fixed: 5.72% -- up from 5.67% last week (avg. points: 0.34) 15-year fixed: 5.02% -- up from 4.99% last week (avg. points: 0.4) 1-year ARM: 3.65% -- down from 3.68% last week (avg. points: 0.28) Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets. The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed. This week, the panel has reversed course. Where last week it was tilting toward rates heading even lower in the next 30 to 45 days, now four out of five predict that rates will stay the same or rise, which would argue for home buyers on the fence to lock now. Only one fifth believe rates will fall. For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI About Bankrate, Inc. Bankrate, Inc. (Nasdaq:RATE) owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Bankrate.com averages 4 million unique visitors per month, according to comScore Media Metrix, which ranks Bankrate.com first in unique visitors in the "Financial Information and Advice" category. Bankrate.com reviews more than 4,800 financial institutions in more than 300 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of more than 250 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com provides financial applications and information to a
network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 100 national and state publications. The Company's stock is included in the Russell 3000 Index and the Russell 2000 Index.
For more information contact:
Paula Sirois, PR for Bankrate, Inc. 561-630-2400 x1499 psirois@bankrate.com