Mortgage rates fell across all loan categories last week, bringing mortgage rates to their lowest level since last October. This involved 15-year and 30-year fixed rate mortgages, both conforming and jumbo loans, FHA-backed loans, based on the weekly application survey of the Mortgage Bankers Association, conducted since 1990 and covers 75 percent of all retail residential mortgage applications.Stock market volatility on a global level was the primary reason. In fact, global stock markets plunged last week, brought by weakness in China and further sharp drops in oil prices along with it. Michael Fratantoni, chief economist of the Mortgage Bankers Association, told CNBC that investors drove down Treasury yields in a flight to safety, and mortgage rates fell.Refinance activity being the most sensitive to rate fluctuations rose 19 percent from the week before, but are 40 percent below where they were a year ago when rates were even lower. However, mortgage applications from buyers looking to finance a purchase, while remaining 17 percent higher than what they were a year ago during the same week, slipped by 2 percent. The average interest rate on a 30-year fixed-rate conforming mortgage, i.e., up to $417,000 for 80 percent loan-to-value ratio, decreased from 4.12 percent to 4.06 percent. Borrowers with substantial down payments and high credit scores obtained even better rates, below 4 percent.
