Bankrate: Mortgage Rates Dip Following Uneventful Employment Report

New York, NY, USA 07 September 2006/PRNewswire-FirstCall/ -- Fixed mortgage rates dipped again, falling for the eighth time in the past 10 weeks. The average 30-year fixed mortgage rate is now 6.45 percent. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.33 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing slid to 6.14 percent. On larger loans, the average jumbo 30-year fixed rate ticked lower to 6.72 percent. Adjustable rate mortgages inched higher. The average 5/1 adjustable rate mortgage increased to 6.24 percent, and the average one- year ARM nosed upward to 5.99 percent.

Fixed mortgage rates were slightly lower after the August employment report came in nearly on target with forecasts, a rare event. With job growth at moderate levels, any concerns about a sharp economic slowdown were alleviated. But job growth wasn't so strong as to ignite fears the Fed may need to resume raising interest rates. However, inflation does remain a risk to bond yields and mortgage rates in the coming weeks, as evidenced by Wednesday's revelation of higher unit labor costs. Another reading on the Consumer Price Index will be delivered prior to the Federal Open Market Committee's next meeting on Sept. 20. Fixed mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are nearly one-half percentage point lower than when the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.45 percent, the same loan originated today would carry a monthly payment of $1,037.49. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

SURVEY RESULTS
30-year fixed: 6.45% -- down from 6.49% last week (avg. points: 0.33)
15-year fixed: 6.14% -- down from 6.2% last week (avg. points: 0.33)
5/1 ARM: 6.24% -- up from 6.22% last week (avg. points: 0.3)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to: http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. The panelists don't see rates continuing to decline. Just 10 percent expect rates to fall further, with 60 percent predicting rates to remain unchanged. The remaining 30 percent forecast that rates will rise from current levels in the next 30 to 45 days.

For the full mortgage Rate Trend Index, go to: http://www.bankrate.com/RTI

About Bankrate, Inc.

Bankrate, Inc. (NASDAQ:RATE) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. It is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2005, Bankrate.com had over 46 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO), America Online (NYSE:TWX), The Wall Street Journal (NYSE:DJ) and The New York Times (NYSE:NYT). Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates FastFind, an internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.