(Source: NY Times) – Falling oil prices typically lead to lower heating bills and cheaper fill-ups at the gasoline pump. Less obvious to the average consumer is the role cheaper oil is playing in driving down mortgage rates.

It is a complicated and indirect link that will likely keep rates low well into 2015, economists say.

Average fixed mortgage rates dropped this month to their lowest levels of the year, according to Freddie Mac. As of Dec. 18, the agency’s weekly mortgage survey showed the 30-year fixed-rate national average was 3.80 percent with an average of 0.6 point. (A point is a fee equal to 1 percent of the loan amount.) The national average for the 15-year fixed-rate loan was 3.09 percent, also with an average of 0.6 point.

Mortgage rates are largely driven by the bond markets and most closely follow the yields (or rates of return) on United States Treasuries. The Freddie Mac survey noted that the bottoming out of average fixed rates earlier this month followed the lowest yields on 10-year Treasuries since May 2013.

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