Posted on: Friday, May 23, 2003
30-year mortgage rate falls to 5.08 percent
Advertiser Staff and News Services
Mortgage interest rates, already at historically low levels, continued to drop this week, hitting an average of 5.08 percent for a 30-year loan and 4.66 percent on a 15-year loan, according to the Honolulu Board of Realtors.
The low rates have set off a rush in refinancing and new mortgages. The board could not immediately say when rates last hit such lows, but experts agreed the rates are the lowest in at least 41 years.
Low mortgage rates have been a key driver of the state's economy, broadening the base of homeowners and freeing up a portion of mortgage payments for the purchase of other goods and services.
"It helps the whole economy," said mortgage broker Don Lau.
For example, the monthly savings on a 30-year, $100,000 loan at Wednesday's average of 5.08 percent interest equates to nearly $63 when compared to the same loan at a 6.08-percent rate.
Lau said it's unlikely 30-year rates will drop much further than the 4.625 percent to 4.75 percent range. Such levels are "pretty rock-bottom, I think," he said.
Nationally, mortgage rates set at least a 41-year low this week, according to numbers released yesterday by Freddie Mac, the nation's No. 2 buyer of home mortgages. It is the seventh time rates dropped to a new low this year.
The national average interest rate on a fixed-rate 30-year mortgage fell to 5.34 percent, which compares with the record low of 5.45 percent a week ago and 6.81 percent a year ago.
The average rate for a 15-year mortgage is 4.73 percent, down from last week's record low of 4.84 percent. The rates assume the borrower is paying 0.7 points in fees or seven-tenths of a percent of the value of the loan. The national rates do not include add-on fees.
Low mortgage rates propelled home sales to record levels last year. And, this year is shaping up to be the second-best year on record for sales of existing homes and new ones, economists say.
The Mortgage Bankers Association of America reported that refinancing activity accounted for 76 percent of all mortgage applications filed last week, up from 72.4 percent the week before.
The housing market has been one of the few bright spots in the country's lackluster economy.
On the Web: Latest Hawai'i mortgage rates are available at the Honolulu Board of Realtors Web site at hicentral.com and Advertiser site at the the.honoluluadvertiser.com/current/bz/mortgage.