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Mortgage rates drop to 4.28 percent

Mortgage rates declined 6 basis points to 4.28 percent since last week, according to the latest data from the Mortgage Bankers Association. As a result of Federal Reserve Chairman Ben Bernanke's abrupt turn-around on the 'tapering' issue, mortgage rates appear now to be pulling back notably after weeks of explosive increases.

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This chart shows average mortgage rates for 30 year and 15 year fixed rate mortgages since 2006.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications. 

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases. 

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 6 basis points to 4.28% since last week while the purchase application volume declined 1% and the refinance application volume increased 3% over the same period. 

As a result of Fed Chairman Bernanke's abrupt turn-around on the "tapering" issue, rates appear now to be pulling back notably after weeks of explosive increases that saw a rise of over 100 basis points. 

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