After the big run up the week before, mortgage rates for the week of July 3, 2013, have been giving borrowers a bit of a respite. When the 30-year fixed mortgage rate bellwether hit 4.75 percent earlier, people really went into a panic believe it was the end of cheap home financing. The reality is that anything below 5 or 6 percent is still historically very inexpensive and wonderful versus rates from previous decades. Those who bought homes 30 years ago, for example, might still remember how rates were in the double digits near 18 percent in the late 1970s and early 1980s.

The reaction, or over-reaction in some opinions, to the Federal Reserve’s language regarding tapering of mortgage-backed securities purchasing had run its course, and people are getting back to business under the new reality. As a result, the 30-year fixed rate average has moved a quarter of point down and is settled closer to 4.5 percent today.

The question going forward is whether the market will be left alone for a while to stabilize or if further impacts will rock the boat again in the next few weeks and months. Traders have now come out of a perceived storm and are getting back to transactions being handled orderly versus damage control. This reduces the need to jack up securities’ returns so much, which drives up mortgage rates as well. That said, the rate averages still have a long way to go to be anywhere near the high 3 percent level from the Spring. Instead, traders and lenders are taking a wait and see approach to see what, if anything, will continue to justify the 4 to 4.5 percent level. If the horizon remains quiet, then under analysis versus panic, rates might drop further.

So to close out the day, the 30-year fixed rate average is at 4.5 percent with a chance to go as low as 4.3 percent, and the 15-year counterpart now has a narrower range of 3.5 to 3.65 percent. The FHA/Veteran’s Administration loan rate also came down from 4.75 percent to between 4 and 4.25 percent instead. The narrower difference to the general market shows even federal agencies are on the fence with the immediate future prognostications. And the 5-year adjustable rate mortgage average floats between 2.8 and 3.4 percent.