Posted on: Friday, March 7, 2003

Mortgage rates again hit record low

• Current Hawai'i mortgage rates

By Jeannine Aversa
Associated Press Writer

WASHINGTON — Mortgage rates dropped to a new low this week, providing good news for people thinking about buying or refinancing a home.

The average interest rate on 30-year fixed-rate mortgages fell to 5.67 percent for the week ending March 7, Freddie Mac, the mortgage company, said yesterday in its weekly nationwide survey.

That passed the previous record low of 5.79 percent set last week and marked the fourth time this year that rates on the benchmark mortgage dipped to a new low.

This week's rate was the lowest since Freddie Mac 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.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing, plunged this week to 5.01 percent, compared with 5.14 percent last week. The new rate is the lowest since Freddie Mac began tracking 15-year mortgages in 1991.

Recent mortgage-rate declines were spurred by falling rates in the Treasury bond market, influenced by concerns about a war with Iraq, economists said.

"The political and economic uncertainty of a war with Iraq is wearing on the confidence of consumers and restraining business expansion," said Freddie Mac's Frank Nothaft. "That, in turn, translates into a weaker economy, which places downward pressure on interest and mortgage rates."

Rates for one-year adjustable rate mortgages dipped this week to 3.76 percent, down from 3.83 percent.

The Mortgage Bankers Association of America, meanwhile, said total mortgage applications filed last week rose by 10.8 percent. Refinancing activity accounted for 74.7 percent of those applications.

A year ago, rates on 30-year mortgages averaged 6.87 percent, 15-year mortgages were 6.37 percent and one-year adjustable mortgages stood at 5.07 percent.