Mortgage rates continue downward

Associated Press

WASHINGTON — Mortgage rates around the country fell for the second straight week, Freddie Mac reported yesterday in its nationwide survey.

The average interest rate on 30-year fixed-rate mortgages dipped to 6.11 percent this week from 6.13 percent last week.

This week's rate was the lowest since the week ending Oct. 11 when rates on the 30-year mortgage dropped to 5.98 percent, the lowest level since the Federal Home Mortgage Corp. began tracking them in 1971. That marked the sixth time this year that 30-year rates hit a new low.

Analysts predicted that rates should go lower following the decision by the Federal Reserve on Wednesday to cut a key interest rate by a surprisingly large half-point.

"Anticipation of a (quarter-point) rate cut pushed mortgage rates downward in this week's survey and we expect to see further downward drifts over the coming week or so ... ," said Frank Nothaft, Freddie Mac's chief economist.

Low mortgage rates have been feeding a refinancing boom. The extra monthly cash saved by refinancing mortgages at lower interest rates is helping to support consumer spending. Home sales are expected to post records this year.

Rates for 15-year fixed-rate mortgages, a popular option, dropped this week to 5.48 percent, from last week's 5.51 percent. For one-year adjustable-rate mortgages, rates dipped to 4.15 percent, from 4.25 percent last week.

This week's mortgage rates do not include add-on fees known as points. Loans carried an average fee of 0.6 point for the 30-year and 15-year mortgages and 0.7 point for the one-year ARMs.

A year ago, 30-year mortgages averaged 6.45 percent; 15-year mortgages were 5.94 percent; one-year ARMS stood at 4.25 percent.