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The Honolulu Advertiser
Posted on: Friday, May 16, 2008

Mortgage rates edge down overall

By Jeannine Aversa
Associated Press Economics Writer

WASHINGTON — Rates on 30-year mortgages edged down this week to their lowest point in a month, a spot of welcome news to would-be home buyers.

Mortgage company Freddie Mac reported yesterday that 30-year fixed-rate mortgages averaged 6.01 percent for the week ending May 15. That was down from last week's 6.05 percent and the lowest since mid-April's 5.88 percent.

Other rates also fell.

Five-year adjustable-rate mortgages dropped to 5.57 percent, from 5.67 percent last week. One-year adjustable-rate mortgages fell to 5.18 percent, from 5.29.

However, rates on 15-year fixed-rate mortgages, a popular choice for refinancing, held steady at 5.60 percent this week.

Rates on the other types of mortgages dipped, reflecting hope on the part of investors that a recovery could be in sight for financial markets, which have been turbulent since last summer.

Earlier this week, Federal Reserve Chairman Ben Bernanke said the turmoil has eased somewhat but that the situation is still fragile.

"Recent remarks by Federal Reserve officials, which partly bolstered optimism that financial markets will recover later this year, helped mortgage rates ease up a little this week," said Frank Nothaft, Freddie Mac's chief economist. In addition, investors took comfort in recent barometers indicating that dangerous inflation is not taking hold, another factor helping ease mortgage rates, Nothaft said.

The mortgage rates do not include add-on fees known as points. The nationwide average fee for one-year adjustable-rate mortgages was 0.7 point. For 30-year and five-year adjustable-rate mortgages, the nationwide average fee was 0.6 point. And, the average fee for 15-year mortgages was 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.15 percent, 15-year mortgage rates averaged 5.87 percent, five-year adjustable-rate mortgages were at 5.89 percent and one-year adjustable-rate mortgages were at 5.48 percent.

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