30-Year Mortgage Rate Hits 7-Week Low in Zillow Mortgage Report

30-year mortgage rateMortgage rates kept tumbling down on the Zillow Mortgages weekly ticker, as 30-year fixed-rate loans ended the Wednesday-to-Tuesday wraparound week with a rate of 3.56 percent, down nine basis points from the prior week’s 3.65 percent. This is the lowest reading in Zillow’s weekly report since seven weeks ago. 15-year fixed mortgages also closed the week on a good note, ending the week at 2.81 percent, while 5/1 adjustable-rate mortgages averaged 2.70 percent.

For most of the week, 30-year FRMs were lower than they were on the previous Tuesday, but did rise to 3.69 percent on Monday before dropping significantly to the current level. According to Zillow vice president of mortgages Erin Lantz, this was mainly driven by the release of the U.S. Federal Reserve’s latest minutes of the meeting, which hinted that the central bank may not increase interest rates right away despite removing the word “patient” from its language.

“Rates fell sharply last week after the Fed statement suggested that rates will remain lower for longer than expected,” she said. “We expect mixed domestic data to drive some small market movements this week, but mortgage rates should remain unchanged.”

For today’s Mortgage Bankers Association Weekly Application Index, Zillow forecasts a rather flat report this week, with no changes in purchase loan activity with seasonal adjustment. For these forecasts, Zillow bases its findings on loan requests made on the company’s website in the previous week with the most recent MBA Weekly Application Index data on record, also from the previous week.

Talking about state-by-state activity, most major markets experienced a huge drop-off in 30-year fixed mortgage interest rates. Colorado experienced the biggest decline among these major states, slipping from 3.67 percent to 3.54 percent. Florida was not far behind, retreating 12 basis points from 3.69 percent to 3.57 percent.

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In Massachusetts and Washington state, 30-year FRMs lost 11 basis points, dipping from 3.63 percent to 3.52 percent in the former state and 3.66 percent to 3.55 percent in the latter. Three states saw 10-basis point declines in 30-year FRMs – Illinois (3.65 percent to 3.55 percent), New Jersey (3.68 percent to 3.58 percent), and Texas (3.65 percent to 3.55 percent).

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