30-Year Fixed Mortgage Rate Drops to 3.57 Percent, Zillow Says

For the second week of 2015, mortgage rates have been falling on Zillow Mortgages. According to the company, 30-year fixed-rate mortgages ended the wraparound week at 3.57 percent as of Tuesday, or one basis point lower than the previous week’s 3.58 percent. Interest rates for 30-year FRMs had mostly played around the 3.64 percent mark, and had gone as low as 3.52 percent on Saturday before ending the week at the current rate.

15-year FRMs were at 2.87 percent for the week ended January 13, 2015, while 5/1 adjustable-rate mortgages clocked in at 2.67 percent.

With the most recent declines, 30-year FRMs remained at their lowest levels in 19 months. Mortgage rates had not been that low since the weeks leading up to summer 2013, when rate levels skyrocketed due to talk of a potential cutback for the Federal Reserve’s quantitative easing stimulus program. “Though rates fluctuated slightly last week, they settled back around the 19-month lows not seen since May 2013,” said Zillow vice president of mortgages Erin Lantz. “It’s hard to see rates staying this low, and we expect rates to be flat or rise slightly this week on higher demand, particularly as refinancing activity picks up.”

For this week’s seasonally adjusted Mortgage Bankers Association Weekly Application Index, Zillow forecasts a decline of 1 percent for seasonally adjusted purchase activity. In previous weeks, the company had been a bit hit-or-miss with regards to these forecasts, but then again, mortgage buying activity did not really make any big moves despite several weeks of decreasing mortgage rates to close out 2014. Zillow’s purchase index predictions are based on loan requests made on its website the past week, as well as that week’s MBA Weekly Application Index data.

Among major mortgage markets per state, New Jersey experienced a rapid increase in 30-year fixed mortgage rates. From 3.59 percent during the week ended January 6, 2015, 30-year FRMs zoomed up 11 basis points to 3.70 percent as of Tuesday, January 13. Also making a move up were 30-year FRMs in New York, which added four basis points to move from 3.61 percent to 3.65 percent.

Meanwhile, most major states in Zillow’s report experienced a decline in mortgage rates. The biggest decline was recorded in Massachusetts, as interest rates improved from 3.61 percent to 3.55 percent, a drop of six basis points. In Washington state, 30-year FRMs slipped from 3.62 percent to 3.57 percent, or five basis points lower from the previous week. Mortgage rates were also down a bit in Pennsylvania, where 30-year FRMs dropped four basis points from 3.60 percent to 3.56 percent.

In Colorado and Florida, 30-year fixed rate loans slid three basis points, from 3.56 percent to 3.53 percent and from 3.58 percent to 3.55 percent respectively. Lastly, interest rate decreases were less prominent in California (3.58 percent to 3.56 percent, two basis points) and in Illinois (3.56 percent to 3.55 percent, one basis point) as compared to other states.