Mortgage Interest Rate Report - February
Last Updated: 2/2/2010

Mortgage Rate News & Analysis

Mortgage interest rates followed a downward course in January according to mortgage finance giant Freddie Mac.

January 7

The average rate on a 30-year fixed rate mortgage (FRM) fell to 5.09 percent, excluding points, during the first week of the month, down from 5.14 percent. Rates on a 15-year FRM dropped to 4.50 percent from 4.54 percent and one-year adjustable rate mortgages (ARMs) averaged a rate of 4.31 percent, down slightly from 4.33 percent the week before.

January 14

Rates continued to fall in the second week with the average on a 30-year FRM dropping to 5.06 percent. The average 15-year FRM rate decreased to 4.45 percent, but the one-year ARM rose to 4.39 percent.

January 21

In the third week, rates on 30-year FRMs dropped again to 4.99 percent and 15-year FRMs averaged 4.40 percent. One-year ARMs experienced a rate decrease, falling to 4.32 percent.

"Fixed mortgage rates followed bond yields lower for the third consecutive week, pushing 30-year mortgages below 5 percent once more," said Frank Nothaft, Freddie Mac vice president and chief economist. "Similarly, ARM rates eased along with shorter-term rates, as the federal funds futures market indicates no increase in the Federal Reserve's target rate following its upcoming committee meeting on January 26th and 27th."

What's Next for Interest Rates?

Based on the market buzz and the recent Federal Reserve rate decision, it is unlikely that interest rates will see much movement in the next month. At its January meeting, the Fed decided to leave its target rate unchanged at its current range of zero to 0.25 percent and it will continue making mortgage-backed securities purchases through February. Although the Fed seemed optimistic about the improvement of the economy, it still said it would not raise its rate for an "extended period of time."

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