Fixed rates for 30-year, 15-year mortgages dip
Associated Press
WASHINGTON — Mortgage rates nationwide edged down this week, with rates on one-year adjustable rate mortgages holding steady for the third consecutive week at their lowest level in 19 years of record keeping.
The average interest rate on a 30-year, fixed-rate mortgage dipped to 5.86 percent for this week from 5.88 percent last week, Freddie Mac reported yesterday in its latest nationwide survey of rates.
Rates on 30-year mortgages started the year by dropping to a new low of 5.85 percent for the week ending Jan. 3. That rate was the lowest since the mortgage giant began tracking 30-year mortgage rates in 1971. Records that reach back earlier than Freddie Mac's indicate that rate is the lowest since the early 1960s.
Fifteen-year fixed-rate mortgages, a popular option for refinancing, edged down to 5.26 percent, compared with 5.27 percent last week.
Rates for one-year adjustable rate mortgages stood at 3.89 percent this week. Rates for one-year ARMs have held steady since the week ending Jan. 31, when they dropped to their lowest level since Freddie Mac began tracking them in 1984.
Low mortgage rates have made for brisk home-mortgage refinancing activity. As consumers swap higher-interest rate home loans for lower-interest rate ones, the extra cash they are saving has helped support consumer spending, one of the few sources of support for the struggling economy.
"The reduced interest rate on mortgages gave homeowners about $100 more per month to spend or save last year," said Frank Nothaft, Freddie Mac's chief economist.
Low mortgage rates powered sales of both new homes and previously owned homes to record highs in 2002. Some economists are predicting that 2003 could turn out to be the second-best year for home sales on belief that mortgage rates will remain fairly stable.
This week's mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried an average fee of 0.6 point this week, while one-year ARMs had an average 0.7 point financing fee.
A year ago, rates on 30-year mortgages averaged 6.86 percent, 15-year mortgages were 6.35 percent and one-year adjustable mortgages stood at 4.98 percent.
