Rates are at 5%

Mortgage rates decreased for a third straight week, sliding below the all-important psychological five-percent threshold, according to mortgage financier Freddie Mac.

The widely popular 30-year fixed averaged 4.99 percent during the week ending January 21, down from 5.06 percent last week and 5.12 percent a year ago.

The 15-year fixed continued to move lower, averaging 4.40 percent this week, down from 4.45 percent last week and 4.80 percent last year.

Fixed mortgages rates continue to follow bond yields lower (how mortgage rates work).

“Similarly, ARM rates eased along with shorter-term rates, as the federal funds futures market indicates no increase in the Federal Reserve’s target rate following its upcoming committee meeting on January 26th and 27th,” said Frank Nothaft, Freddie Mac chief economist, in a statement.

The five-year adjustable-rate mortgage slipped to 4.27 percent from 4.32 percent, and sits nearly a point below the 5.24 percent seen last year.


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The one-year ARM also improved, falling to 4.32 percent from 4.39 percent, 60 basis points lower than the 4.92 percent average of a year ago.

The mortgage rates above are good for conforming loan amounts at 80 percent loan-to-value with no pricing adjustments factored in.

Jumbo loans continue to price a percentage point or so higher than conforming loans.