Posted on: Friday, June 3, 2005
30-year mortgages down again
By Martin Crutsinger
Associated Press
WASHINGTON — Rates on 30-year mortgages fell this week for the eighth time in the past nine weeks, hitting the lowest level in four months, according to an industry report.
Mortgage giant Freddie Mac said yesterday its weekly nationwide survey showed that rates on 30-year, fixed-rate mortgages averaged 5.62 percent, down from 5.65 percent last week.
The latest decline pushed the 30-year mortgage down to the lowest level since it dipped to 5.57 percent on Feb. 10, the low-point so far this year.
The steady decline in mortgage rates over the past two months has helped spur sales of both new and existing homes to record levels in April and analysts predicted strong sales in May, based on further declines in rates.
"Given the low rates we experienced last month, we expect home sales in May will remain strong," said Frank Nothaft, Freddie Mac's chief economist.
But he said that an improving job market and rising wages will likely begin to put upward pressure on mortgage rates in coming months.
For 15-year fixed-rate mortgages, a popular option for refinancing, rates dipped to 5.20 percent this week, down from last week's 5.21 percent.
However, rates on one-year adjustable rate mortgages edged up slightly to 4.26 percent from 4.21 percent the previous week.
And rates on five-year hybrid adjustable rate mortgages rose to 5.10 percent, up from 5.07 percent last week. These hybrid mortgages have a fixed-rate for five years and then adjust each year after that.
The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year, 15-year and one-year mortgages carried a nationwide average fee of 0.6 point while the five-year ARM had an average fee of 0.5 point.
A year ago, 30-year mortgages averaged 6.28 percent, 15-year mortgages were at 5.63 percent and one-year ARMs averaged 3.98 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.
