Posted on: Friday, October 29, 2004

Mortgage rates continue to decline

By Jeannine Aversa
Associated Press

WASHINGTON — Mortgage rates declined again this week, with 30-year mortgages dropping to the lowest level since early April, providing more of a boost to the housing industry.

Rates on 30-year, fixed-rate mortgages averaged 5.64 percent for the week ending Oct. 28, Freddie Mac said in its weekly survey. That was down from

5.69 percent last week and was the lowest level since they averaged 5.52 percent for the week ending April 1.

Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13 before starting to head lower as markets responded to various signals that rising energy prices were acting as a drag on economic growth.

The lower mortgage rates have spurred sales of both new and existing homes, which climbed in September to the third-highest levels in history. Analysts believe sales for all of 2004 will set records as well.

"Low mortgage rates drove the uptick in sales during September," said Frank Nothaft, Freddie Mac's chief economist.

"And with mortgage rates at their lowest level in six months, home sales should continue strong through the autumn months," Nothaft said.

For 15-year, fixed-rate mortgages, a popular option for refinancing, rates dropped this week to 5.01 percent compared with 5.07 percent last week.

For one-year, adjustable rate mortgages, rates fell to 3.96 percent, down from 4.02 percent last week.

Both were the lowest levels since the spring.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a 0.7 point fee.

One-year mortgages had a 0.8 point fee.

A year ago, rates on 30-year mortgages averaged 6.05 percent with 15-year mortgages at 5.39 percent and one-year ARMs at 3.76 percent.