Mortgage rates in the United States fell to a 14-month low for the week ended Oct. 16, according to Freddie Mac's Primary Mortgage Market Survey (PMMS).
The average 30-year-fixed mortgage rates slumped to 3.97 percent from last week's 4.12 percent. The rate was 4.28 percent at the same time, last year. This is the first time the rates fell below 4 percent.
The average 15-year-fixed mortgage rates went down to 3.18 percent from last week's 3.30 percent. It averaged 3.33 percent at the same time, last year.
The five-year treasury-indexed hybrid adjustable mortgage rate declined to 2.92 percent from last week's 3.05 percent. The rate was 3.07 percent a year ago.
The average one-year treasury-indexed adjustable mortgage rate slid to 2.38 percent this week after remaining unchanged at 2.42 percent from the past two weeks. The rates averaged 2.63 percent at the same time last year.
Mortgage rates usually depend on the yield on 10-year treasury bonds. The government-bond yields tumbled 0.14 percent percentage points within just 10 minutes of Thursday's opening trade. According to the Wall Street Journal, traders who were banking on a better economic growth in the United States gave in.
Freddie Mac's chief economist Frank Nothaft also acknowledged the fall in 10-year treasury rates that triggered off a slide on mortgage rates as well.
"Mortgage rates were down sharply following the decline in the 10-year Treasury yield for the second straight week. Rates are at their lowest levels since June 2013 amidst continued investor skepticism regarding the precarious economic situation in Europe," Nothaft said.
Other experts say that the Ebola scare could have added to the lack of investor confidence in the U.S. economy. They are, however, encouraging people to lock down on these low rates while it lasts.
"This may be a very short term move and homeowners looking to cash in on lower rates through refinancing should act quickly as this may be a temporary dip, especially if the economy and optimism pick up as we approach the holiday season," Craig Strent, CEO of Rockville-based Apex Home Loans, wrote in an email to the Washington Post.
And, people have been listening. According to the Mortgage Banking Association, the total volume of home loan applications went up 5.6 percent on a week-over-week basis with refinancing applications taking up 11 percent of the hike.
