Mortgage rates went down sharply last week. It is the sharpest decline we have seen over a peed of past few weeks. Home mortgage rates have come down intensively from the peak in June 2009. The most obvious reason for this is that world economy in general and US economy in particular is showing signs of late recovery. Some economic pundits are even saying that we have not seen the bottom yet!

Week Economic Outlook

Amidst of all this week economic data, and poor financial outlook, U.S. Treasury rates have declined significantly. Federal Reserve Bank is in no mood to touch the interest rate in near future. This situation is likely to keep Fed fund’s target rates between zero percent and one quarter of a percentage. U.S. economy is very less likely to rebound swiftly. Even European Union has also moved it forecast for economic recovery to late 2010 or early 2011.

30-Year Fixed Rate Mortgage

Last month mortgage interest rates for 30-year fixed mortgage were near six percent. Currently they are back down to almost five percent.  Average 30-year fixed mortgage rates were at 5.20 percent. These rates are significantly lower than 5.40 percent of the week before. Average mortgage re-finance rates are also stable at 5.20 this week.

15-Year Fixed Rate Mortgage

For 15-year fixed mortgage the rates are even lower this week. they are currently at 4.72 percent. again a sharp decline from 4.87 percent of  of prior week’s average.

Mortgage Rate Outlook

short term outlook for 15-year fixed rate mortgage is at around 4.50 percent +/- 10 basis points. It is interesting to know that  on June 15th, 2009 the 15 year fixed rate mortgage were averaging at 5.20 percent.

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