After `Recessionnette,' Mortgage Rates Barely Budge; Bankrate.com Posts Weekly Mortgage Survey Results.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 30, 2002

Mortgage rates were split this week in Bankrate.com's national survey of lenders, with 30-year fixed mortgage rates rising slightly and adjustable rates declining modestly. Rates on the benchmark 30-year fixed mortgage rose 1 basis point to 6.80 percent, with rates on the 15-year fixed remaining unchanged. Rates on the 1-year adjustable mortgage dropped by 3 basis points to 5.16 percent since last week. A basis point is one-hundredth of a percent.

"We had a recession that was so mild some commentators have wondered whether there was a recession at all; others call it a 'recessionette,'" said Bankrate mortgage writer Holden Lewis. "Now we're in a recovery -- a recoveryette? -- that looks alternately strong and weak, depending on how you look at it. As a result, 30-year mortgage rates have hovered in a narrow range in 2002. There has been no economic news to give interest rates a sustained, upward or downward shove."

Mortgage rates were particularly stagnant this week after falling last week to the lowest point since November. One week ago, financial markets and mortgage rates alike dropped as investors, skittish about potential terrorist attacks, moved into the safety of government securities. Mortgage rates closely track the yields on Treasury notes, which fall in response to heightened demand. This week, as those fears abated somewhat and financial markets saw the two lightest volume trading days of 2002, rates remained largely unchanged. A mixed bag of economic news regarding home sales and consumer expectations for the economy had little effect on mortgage rates.

"Another strong month in sales of existing homes, aided by low mortgage rates, is continued validation of an improving economy," said Bankrate financial analyst Greg McBride. "Just as investors are awaiting any catalyst to propel the stock market higher, mortgage shoppers are hoping such a catalyst doesn't come. To this point it hasn't, and rates remain well below the 7-percent barrier."

Low mortgage rates mean low monthly payments for home buyers and homeowners who refinance. This week, a 30-year fixed rate mortgage of $150,000 carries a monthly payment of $977.89. Those looking at a shorter-term loan will find a monthly payment of $1,288.59 on a 15-year fixed mortgage with the average rate of 6.28 percent.

Most of the mortgage experts polled for Bankrate.com's weekly Rate Trend Index agree that the good mortgage news is likely to stick around for at least another 30-45 days. Just 11 percent of the experts believe mortgage rates will rise in that period. More than half -- 56 percent -- think rates will remain relatively unchanged (plus or minus 2 basis points) and 33 percent say they'll drop.

To see this week's expert survey, go to http://www.bankrate.com/RTI. For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates.

                          SURVEY RESULTS

  30-year fixed: 6.80 - up from 6.79 last week (avg. points: 0.48)
  15-year fixed: 6.28 - unchanged from last week (avg. points: 0.44)
   1-year ARM: 5.16 - down from 5.19 last week (avg. points: 0.41)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets. For more details about the survey, and a breakdown of the mortgage rates charged in those cities, go to http://www.bankrate.com.

About Bankrate Inc.

Bankrate Inc. (OTCBB:RATE) owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Averaging 4 million unique visitors per month, Jupiter Media Metrix ranked Bankrate.com first in unique visitors in the "Financial information and advice" category in February 2002. Bankrate.com reviews more than 4,800 financial institutions in 173 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of over 100 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees.

Bankrate.com provides financial applications and information to a network of more than 80 partners including MSN (Nasdaq:MSFT), Yahoo! (Nasdaq:YHOO), America Online (NYSE:AOL), and Smart Money. Bankrate.com's information is also distributed through more than 100 national and state publications.