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The Honolulu Advertiser
Posted on: Friday, April 20, 2007

Mortgage rates fall first time in weeks

By Martin Crutsinger
Associated Press

WASHINGTON — Rates on 30-year mortgages edged down for the first time in six weeks as investors saw evidence that inflation is not getting out of hand.

In its weekly survey, mortgage giant Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.17 percent this week.

That was down from 6.22 percent last week and marked the first decline in the 30-year rate since it dropped in early March to 6.14 percent, the lowest level for this year.

Analysts attributed this week's slight decline to the latest reports on inflation, which showed few price pressures outside of energy.

"Excluding food and energy, the core inflation rate for consumer prices rose 2.5 percent year-over-year, the smallest annual growth since May 2006," said Frank Nothaft, chief economist at Freddie Mac.

Nothaft said that the low mortgage rates that have prevailed so far in 2007 may be helping to stabilize the housing market, which saw sales and construction activity fall sharply last year.

The government reported earlier this week that construction of new homes and apartments rose for a second straight month in March, although some analysts cautioned against reading too much into the rebound, given that much of the strength came from warmer-than-normal weather.

Other mortgage rates also fell this week, Freddie Mac said in its nationwide survey.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, dipped to 5.89 percent, down from 5.90 percent last week.

Five-year adjustable-rate mortgages averaged 5.92 percent, compared with 5.93 percent last week. One-year adjustable mortgages edged down to 5.45 percent from 5.47 percent last week.

The mortgage rates do not include add-on fees known as points.

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