Posted on: Friday, September 26, 2003
30-year mortgage rates fall for third week — to 5.98%
| • | Current mortgage rates |
By Jeannine Aversa
Associated Press
WASHINGTON — After rising sharply since late June, rates on benchmark 30-year mortgages retreated for the third week in a row, a trend that should help keep the housing market humming.
For the week ending today, the average rate on 30-year mortgages dipped to 5.98 percent from 6.01 percent a week ago, the mortgage company Freddie Mac reported yesterday in its weekly nationwide survey of rates.
The rate was the lowest since late July, when 30-year mortgages averaged 5.94 percent.
Rates on 15-year fixed-rate mortgages held steady at 5.30 percent this week. Rates for one-year adjustable mortgages edged down to 3.77 percent, from 3.81 percent.
The averages for mortgage rates do not include add-on fees known as points. Thirty-year and one-year ARMs each carried an average fee of 0.6 point this week. Fifteen-year mortgages carried an average 0.5 point fee.
A year ago, rates on 30-year mortgages averaged 5.99 percent, 15-year mortgages were 5.41 percent and one-year adjustable mortgages stood at 4.22 percent.
In mid-July rates on 30-year mortgages slid to 5.21 percent, the lowest in more than four decades. But then investor concerns about the economy and the Federal Reserve's handling of short-term interest rate policy pushed bond rates up, causing long-term mortgage rates to rise. In the past three weeks, however, rates on 30-year mortgages have gone down.
Freddie Mac economist Amy Crews Cutts, explaining the drop below 6 percent for 30-year fixed rate mortgages, said that "investors in bond markets were calmed by assurances from Fed monetary policy-makers that no action would be taken until 2004" to raise short-term interest rates.
She was referring to the Fed's decision last week to hold a key short-term interest rate at a 45-year low of 1 percent and the Fed's statement that short-term rates may stay at such low levels for some time.
Even with the recent gyration in mortgage rates, sales of both new homes and previously owned ones soared in August and are on track to set record highs this year. Also, home-mortgage refinancing activity remains healthy, economists said.
The Mortgage Bankers Association of America said that refinancing accounted for 51.9 percent of all mortgage applications filed last week. That was up from 49.9 percent in the previous week.
