Mortgage Rates Break Record Lows Again: 30 Year Mortgages @ 4.54%, 15 Year Mortgage Rates @ 4.00%

Mortgage rates broke record lows again this week. This is the sixth consecutive week fixed mortgage rates eased to record lows. Fixed conforming 30 year mortgage rates and fixed conforming 15 year mortgage rates have hit all-time lows in this week’s Primary Mortgage Market Survey released by Freddie Mac.  

Mortgage rates will stay at these low levels for the foreseeable future and might even head lower if we head into a deflationary period. James Bullard, president of the Federal Reserve Bank of St. Louis, was on CNBC Friday morning and had some interesting comments about inflation and monetary policy.  He told CNBC the Federal Reserve should have a ”significant quantitative easing if deflationary expectations in the U.S. continue. ”

He also said ”when you get below a certain inflation rate you have to get off interest-rate targeting, adding that the Fed’s policy should turn more towards quantitative easing — a policy where central banks increase the money supply through other means than interest rates, such as buying government debt ”

Buying government debt will help keep Treasury yields low which will keep mortgage rates low since mortgage interest rates are tied to Treasury yields.

Fixed conforming 30 year mortgage rates are averaging 4.54 percent for the week ending July 29, 2010, down from the prior week’s average 30 year mortgage rate of 4.56 percent. Mortgage discount points on 30 year mortgages averaged 0.7 points, no change from the prior week’s average.

15 year mortgage rates could break 4.00 percent next week if mortgage rates continue to head lower. Conforming fixed 15 year mortgage rates are averaging 4.00 percent for the week ending July 29, 2010, down from the previous week’s average of 15 year mortgage rate of 4.03 percent. Mortgage discount points average 0.7 points.

5 year Treasury indexed adjustable mortgage rates are averaging 3.76 percent for the week ending July, 29, 2010, down from the prior week’s average 5 year adjustable mortgage rate of 3.79 percent. Mortgage discount points averaged 0.7 points.

1 year adjustable mortgage rates are down to 3.64 percent for the week ending July 29, 2010, down from the previous week’s average 1 year adjustable mortgage rate of 3.70 percent.