Zillow: Mortgage rates continue to drop

Mortgage rates continued to drop in 2010, according to Zillow Mortgage rates continued to fall to ideal levels that complement the current homebuyer tax credits, as all major types of mortgages saw a decrease for the week ending January 17, according to the Zillow Mortgage Rate Monitor.

Average interest rates for 15-year fixed rate mortgages saw a sizable decline of 0.08 percentage points for the week, falling to 4.33 percent. The decline surpassed the 0.07 percentage point drop seen one week earlier to end a streak of sizable rate declines that had occurred throughout December 2009.

Likewise, average rates for 30-year FRMs declined as well, falling 0.05 percentage points to remain under 5 percent at 4.94 percent. The decline also followed up a 0.06 percentage point decline that had ended a streak of four weeks that had seen rate increases.

Average rates for 5-1 adjustable-rate mortgages saw the steepest decline of the week, shedding 0.13 percentage points to fall under 4 percent to 3.93 percent for the week. The prior week the shorter-term rates had seen a 0.09 percentage point decline.

Despite the drop in rates, the volume of mortgage requests remained about the same on a week-to-week basis. Thirty-two percent of all requests were for refinance loans, one percent higher than last week, while purchase loans remained the same at 66 percent.