After a wild and woolly few weeks that have seen mortgage rates ride a fast-changing roller coaster that most aren't accustomed to, long-term rates remained relatively calm during the past week as moves by the Fed and other government regulators helped restore some semblance of order to a secondary mortgage market that is still very much out-of-sorts.
Mortgage rates
week of March 26, 2008
30-year fixed5-year ARM
current rate:5.95%6.16%
According to data released Thursday morning by, fixed-rate mortgages remain at a significantly lower rate relative to adjustable-rate mortgages -- driving ARM share of application activity to near an all-time low. The Mortgage Bankers Association reported Wednesday that adjustable-rate applications represented just 3.8 percent of all applications during the past week. Fixed mortgage rates inched lower over the past week, with the average conforming 30-year fixed mortgage rate now at 5.95 percent, with an average of 0.49 discount and origination points; the average jumbo 30-year fixed rate declined modestly to 7.37 percent, said. Adjustable mortgage rates were very mixed, however, with the average 1-year ARM rising to 6.25 percent while the average 5/1 ARM plunged to 6.16 percent. It's unusual, to say the least, to see fixed mortgage rates lower than the rates offered to borrowers taking adjustable rate mortgages -- usually, the entire reason a borrower takes out an ARM is to arbitrage the current rate environment in their favor. But adjustable rate mortgages have higher instances of delinquency than fixed rate loans, and investors are exacting a price for that by commanding higher returns. Translation: higher rates for ARM borrowers. Despite the relative calm in the markets, experts that spoke with HW Thursday morning said the rate environment will likely continue to be very volatile throughout the foreseeable future. "Don't be fooled into thinking rates have settled down," said one source, a bond trader who asked not to be named. "The dynamics driving volatility are still very much in place, even if the technicals aren't moving right now."