Posted on: Friday, December 26, 2003
30-year mortgage declines for 3rd-straight week to 5.81%
By Jeannine Aversa
Associated Press
WASHINGTON — Rates on 30-year and 15-year mortgages dipped for the third week in a row, offering a dose of cheer to prospective buyers of homes.
For the week ending Dec. 26, the average rate on 30-year mortgages nudged down to 5.81 percent, slightly lower than the 5.82 percent rate seen last week, Freddie Mac, the mortgage giant, reported in its weekly nationwide survey of mortgage rates.
Rates on 30-year mortgages dropped to 5.21 percent, the lowest level in more than four decades, in the middle of June. Since then, rates on these benchmark mortgages have bounced up and down.
For 15-year mortgages, a popular option for refinancing, rates edged down this week to 5.13 percent from 5.14 percent the previous week.
Rates for one-year adjustable mortgages, meanwhile, averaged 3.73 percent, down from 3.77 percent last week.
A year ago, rates on 30-year mortgages averaged 5.93 percent, 15-year mortgages were 5.32 percent and one-year adjustable mortgages stood at 4.01 percent.
The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried an average fee of 0.7 point; fifteen-year mortgages carried an average fee of 0.6 point and one-year ARMs carried an average fee of 0.5 point.
"Interest rates cannot rise too quickly any time soon because the inflation indicators have been declining," said Amy Crews Cutts, Freddie Mac's deputy chief economist.
The housing market, powered by low mortgage rates has helped to support the economy this year. Even though the government reported Wednesday that new-home sales fell by 2.4 percent in November, private economists predict home sales will set a record high for all of 2003.
Separately, the Mortgage Bankers Association of America said refinancing accounted for 51.7 percent of all home-mortgage applications filed last week, down slightly from 51.8 percent the previous week. Refinancing this year has helped to underpin consumer spending, a main force keeping the economy rolling along.
