The larger jumbo 30-year fixed rate slipped even further this week to 3.92 percent, the lowest since late April.
According to Bankrate.com’s weekly national survey, the average 15-year fixed mortgage fell to 3.19%, while adjustable mortgage rates dropped as well, with the five-year ARM moving to 3.16% while the seven-year ARM went down to 3.33%.
For Randall, interest rates play a huge factor not only in how much debt clients are willing to take on, but the size of home they are shopping for.
“That move-up borrower considering a larger home is very interest rate conscious,” Randall told MPA. “If rates climb, the move up borrower is less likely to take that leap to the larger home.”
Mortgage rates slipped amid turmoil in financial markets around the globe, as nervousness surrounding the Chinese economy and the extent of the slowdown in their growth rate sparked a sell off in global stock markets and a flight to safety in bonds.
Mortgage rates, and the government bond yields to which they are closely related, dropped in response. The rocky financial markets also raise the possibility of the Federal Reserve further delaying their plans to hike interest rates, which also helps to keep a lid on mortgage rates.
“The jumbo buyer over the last 30-45 days was exploring more hybrid ARM (adjustable rate mortgage) options to save on payment,” says Christopher Randall, capital markets senior vice president for HomeBridge Wholesale. “With the dip in rates, jumbo borrowers are back to focusing on a 30-year fixed jumbo product.”