Mortgage Rates Reach Lowest Point in Three Months

Many people are thinking about refinancing a home mortgage, but are hesitant to pull the trigger because they want to get the best rate. If so, they might be in luck since mortgage rates have reached their lowest point since May.

According to Freddie Mac, as of August 23 current mortgage rates were at 5.12 percent for a 30-year fixed-rate mortgage. That was down from 5.29 percent the previous week and from 6.47 percent at the same time last year.

Freddie Mac chief economist Frank Nothaft said one reason for the drop was the falling yields in treasury bonds, which are closely tied to mortgage rates. Treasury bond yields have been falling steadily in the third quarter of 2009.

Lower mortgage refinance rates can spur homeowners who were debating about refinancing to take the plunge, according to economists. Only time will tell if homeowners see the current dip as a valley, or if they think rates will drop even further in the coming weeks and months.