Homeowners who put off refinancing got a piece of welcome news this week: Fixed-rate mortgages fell sharply to their lowest levels since late April.
But now might not be the time to delay again.
"With windows of opportunity, you never know how long they are going to stay open," said Joel Naroff, of Naroff Economic Advisors in Holland, Pa.
Naroff and other economists agree that in the long run, fixed-rate mortgages are now headed up. But because the economy is still recovering, there are likely to be swings up and down, touched off by strong or weak economic reports.
This week's decline in the 30- and 15-year rates was sparked by last week's report that job creation in June was weaker than expected, Naroff said. "The next time we get a strong economic report, the move could turn and turn sharply," he said.
Thirty-year home loans averaged 6.01 percent this week, with the recipient paying an average 0.6 point to get the loan. That's down sharply from 6.21 percent last week, according to Freddie Mac's Primary Mortgage Market Survey. The 30-year average fell for the third consecutive week.
On a $200,000 mortgage, this week's two-tenths of a point drop translates to a $26-a- month savings on monthly payments from last week's rate.
Since mid-March, the average for 30-year, fixed-rate mortgages has surged from a low of 5.38 percent to as high as 6.34 percent in May. On a $200,000 mortgage, those increased borrowing costs added $120 more to monthly principal and interest payments.
Declines in the past three weeks have shaved $43 off that monthly payment.
Two factors heavily influenced this week's fall in mortgage rates, economists said.
The Federal Reserve made the expected quarter-point increase in short-term interest rates, and it also indicated that future rate increases would come at a "measured" pace - suggesting that inflation was not growing as fast as previously thought.
And last Friday's jobs report suggested that the economy may not be recovering as fast as some experts had thought.
Freddie Mac expects 30-year mortgage rates to average 6.25 percent for the rest of the year, moving in a range between 6 percent and 6.5 percent.
Freddie Mac reported yesterday that the average for 15-year, fixed-rate mortgages also fell, to 5.42 percent, with an average 0.6 point, compared with 5.62 percent last week.
One-year, adjustable-rate mortgages declined to 4.05 percent, with an average 0.6 point required of the buyer, compared with 4.19 percent last week.
The Hartford Courant is a Tribune Publishing newspaper.