Posted on: Friday, October 15, 2004
30-year mortgage rate falls to 5.74%
| • | Chart: 30-year rate still in mid-5 percent range |
By Martin Crutsinger
Associated Press
WASHINGTON — Mortgage rates fell this week, erasing most of last week's big increase, Freddie Mac reported yesterday.
The mortgage giant reported in its weekly survey that 30-year mortgages retreated to 5.74 percent this week, after climbing to 5.82 percent last week, which had been the highest level in a month.
Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13. Then during the late spring and early summer, rates slowly drifted downward as economic activity cooled, easing fears about inflation.
However, since late August, rates have been exhibiting a seesaw pattern as markets responded to a variety of mixed signals on economic growth.
Economists said the latest drop in interest rates reflected market disappointment about the latest unemployment report, which showed a lower-than-expected 96,000 payroll jobs were added in September.
"The decline in mortgage rates was primarily due to a weak employment report for September, which suggested economic growth is still a bit subdued," said Freddie Mac chief economist Frank Nothaft. "As a result, we expect mortgage rates will continue to stay quite affordable over the next few months, benefiting future homebuyers."
For 15-year, fixed-rate mortgages, a popular option for refinancing, rates dropped this week to 5.14 percent, down from 5.24 percent last week.
Rates on one-year adjustable rate mortgages declined to 4.01 percent this week, down from 4.08 percent last week.
The nationwide averages for mortgage rates do not include add-on fees known as points. Each mortgage type carried a 0.6 point fee.
Home sales are expected to hit record highs this year, aided by low mortgage rates.
A year ago, rates on 30-year mortgages averaged 5.95 percent, with 15-year mortgages at 5.26 percent and one-year ARMs at 3.69 percent.
