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The Honolulu Advertiser
Posted on: Friday, March 24, 2006

30-year mortgages dip again to 6.32%

By Martin Crutsinger
Associated Press

WASHINGTON Rates on 30-year mortgages, which had jumped to the highest level in 2 1/2 years, edged down for a second straight week.

Mortgage giant Freddie Mac reported yesterday that rates on 30-year, fixed-rate mortgages averaged 6.32 percent this week, down from 6.34 percent the previous week.

The decline was the second in a row after 30-year rates had reached a high of 6.37 percent the week of March 9, the highest point since rates averaged 6.44 percent the week of Sept. 5, 2003.

Analysts attributed the latest decline to news on inflation easing investors' worries about price pressures. Wholesale prices tumbled by 1.4 percent in February, the biggest drop in nearly three years, while consumer prices were up 0.1 percent last month after having jumped by 0.7 percent in January.

"The most recent economic indicators ... showed that inflation is, indeed, being held in check. That news allowed long-term mortgage rates to drift a little lower," said Frank Nothaft, chief economist at Freddie Mac.

The National Association of Realtors reported yesterday that sales of existing homes shot up by 5.2 percent in February after five straight months of declines.

Analysts said the unexpectedly strong showing for sales last month was heavily influenced by unusually warm weather but also offered hope that the housing market will slow this year but not collapse.

"The housing industry remains fundamentally fit as we move into the spring buying season," Nothaft said.

Rates on 15-year, fixed-rate mortgages, an option for refinancing a home mortgage, averaged 5.97 percent this week, down from 5.98 percent last week.

One-year adjustable rate mortgages edged up to 5.41 percent, compared with 5.37 percent last week.

Rates on five-year hybrid adjustable rate mortgages also rose, climbing to 5.96 percent, up from 5.93 percent last week.

The mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages carried an average nationwide fee of 0.6 point; the one-year ARM and the five-year ARM carried average fees of 0.7 point.

A year ago, 30-year mortgages averaged 6.01 percent, 15-year mortgages stood at 5.56 percent, one-year adjustable-rate mortgages were at 4.24 percent and five-year hybrid adjustable rate mortgages averaged 5.35 percent.