Mortgage Rates Fall to Lowest Levels since April: Are they heading lower?

[AJ Wong]

Home loan borrowing costs eased again for the third straight week as the average rate on a 30 year home loan declined to its lowest level since April. 

The rate fell from 6.95% last week to 6.87% this week. 

Rates on 15 year fixed mortgages, which can be popular refinance options also eased to 6.13%. 

We had a recent FHA quote with 3.5% down in the high 5%'s..

What do you expect from the purchase and refinance markets if rates drop by 1%? Let's say FHA loans in the high 4%'s and conventional in the high 5%'s?