Mortgage rates drop second straight week

• Current Hawai'i mortgage rates

By Jeannine Aversa
Associated Press

WASHINGTON — Mortgage rates around the country fell for the second straight week, with rates on one-year adjustable rate mortgages dropping to their lowest level on record.

The average interest rate on 30-year fixed-rate mortgages dipped to 6.03 percent for the week ending Dec. 20, down slightly from the previous week's 6.04 percent, Freddie Mac reported yesterday in its weekly nationwide survey.

In the middle of November, rates on 30-year mortgages plunged to 5.94 percent, the lowest level since the mortgage giant began tracking them in 1971. After that, mortgage rates edged up for three straight weeks but have gone down in the past two weeks.

Rates on 15-year fixed-rate mortgages, a popular option for refinancing, fell this week to 5.42 percent, compared with 5.46 percent in the prior week.

For one-year ARMs, rates dropped to 4.07 percent this week, the lowest level since Freddie Mac began tracking the rates in 1984. Last week's rate was 4.18 percent.

Low mortgage rates this year have been feeding a flurry of home mortgage refinancing activity. The extra monthly cash consumers are saving by refinancing their mortgages at lower interest rates is helping to support consumer spending.

Separately, the seasonally adjusted percentage of credit-card accounts 30 or more days past due dipped to 3.81 percent in the third quarter, down from 3.91 percent in the second quarter, the American Bankers Association reported yesterday.

"The lower delinquencies are a sign that consumers are doing a pretty good job managing their finances against the odds," said ABA's chief economist James Chessen. "The continuing saga of a weak economy appears to have focused the attention of consumers on protecting their financial health."

The delinquency rate on a composite of other types of consumer loans, including auto loans and closed-end home equity loans, dipped to 2.06 percent in the third quarter, down from 2.17 percent in the second quarter.

"Lower interest rates, particularly for mortgages, have been the saving grace for many individuals, allowing them to lower their monthly payments and consolidate debt at attractive rates," Chessen said.

This week's mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.