30-year mortgage decreases to 5.77 percent
By Jeannine Aversa
Associated Press
WASHINGTON — Mortgage rates fell this week, with rates on 30-year mortgages dropping to their lowest level in five months, good news for potential home buyers.
Freddie Mac, in its weekly nationwide survey released yesterday, said rates on 30-year, fixed-rate mortgages dipped to 5.77 percent for the week ending yesterday. That's down from 5.82 percent last week and was the lowest since rates 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. Since then, rates, while bouncing around, have drifted downward as economic activity cooled in the late spring and early summer.
Frank Nothaft, Freddie Mac's chief economist, said a drop in consumer confidence reported earlier this week has raised concerns among some Wall Street investors about consumers' willingness to spend in the coming months.
"The drop in consumer confidence left an unsavory taste in the market, creating a fear that consumer spending will slow," he said. "Because consumer spending constitutes about two-thirds of the economy, this could seriously impact economic growth. As a result, interest rates tend to retreat to lower levels."
For 15-year, fixed-rate mortgages, a popular option for refinancing, rates dipped this week to 5.15 percent, down from 5.21 percent last week. Rates on one-year adjustable rate mortgages declined to 3.97 percent, compared with 4.05 percent last week.
The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year mortgage and the one-year ARM each carried an average 0.8 point fee this week. Fifteen-year mortgages carried a 0.7 point fee.
A year ago, rates on 30-year mortgages averaged 6.32 percent with 15-year mortgages at 5.66 percent and one-year ARMs at 3.88 percent.
The Mortgage Bankers Association, meanwhile, said refinancing accounted for 40.7 percent of all home mortgage applications filed last week, up from 40.4 percent during the previous week.
