Mortgage Rates

MORTGAGE RATES HIT TWO-MONTH LOW

Mortgage rates dropped this week in a classic illustration of a phenomenon known as the flight to quality. The benchmark 30-year fixed-rate mortgage fell 9 basis points, to 6.2%, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.32 discount and origination points. One year ago, the mortgage index was 6.27%; four weeks ago, it was 6.42%. The freakish week began with a prediction from Alan Greenspan, former chairman of the Federal Reserve, that a recession could hit the U.S. economy this year. Then there was a rout in Chinese stock markets, where a prominent index dropped by 9%. After that, the Dow Jones industrial average fell 3.3%. (Source: Bankrate.com)