Rates on 30-year Mortgages Edge Down

Rates on 30-year mortgages edge down
By Martin Crutsinger, Associated Press

WASHINGTON -- Rates on 30-year mortgages dipped slightly this week, the second decline after five weeks of increases. The mortgage company Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.67 percent this week, compared with 6.69 percent last week. Rates had hit an 11-month high of 6.74 percent two weeks ago. Analysts attributed the slight retreat over the past two weeks to developments in bond markets, where investors have grown less worried that global growth could lead to higher inflation. They said the worsening state of the housing industry also was acting to lower rates.

"This week we saw further effects of the current housing recession," said Frank Nothaft, chief economist at Freddie Mac. He noted that existing home sales dipped to the slowest pace in four years while the number of unsold homes on the market climbed to the highest level in 15 years.
The overall economy slowed to an anemic 0.7 percent growth rate in the first three months of this year, the weakest performance in more than four years, with housing a major factor, the government reported Thursday.

Rates were affected this week by market wariness in advance of Thursday's announcement by the Federal Reserve that it would leave a key interest rate at 5.25 percent, where it has remained for the past year. The Fed announcement gave a boost to Wall Street because the central bank said inflation readings had improved a bit.

All mortgage rates tracked by Freddie Mac showed declines this week. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 6.34 percent from 6.37 percent last week. Five-year adjustable-rate mortgages averaged 6.30 percent, down from 6.31 percent. One-year adjustable mortgages fell to 5.65 percent, compared with 5.66 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.5 point. Five-year adjustable mortgages and one-year ARMs carried a fee of 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.78 percent, 15-year mortgages were at 6.43 percent, five-year adjustable-rate mortgages averaged 6.39 percent and one-year ARMs were at 5.82 percent.

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