WASHINGTON – Mortgage rates around the country dropped this week to their lowest levels in seven months, good news for prospective home buyers.
The average rate on benchmark 30-year mortgages fell to 5.58 percent, down from 5.66 percent last week,
Freddie Mac, the mortgage giant, said Thursday in its weekly nationwide survey of mortgage rates. This week’s rate was the lowest since 5.52 percent for the week ending July 11.
Rates on 30-year mortgages sank to 5.21 percent in the middle of June, the lowest level in more than four decades. Since then rates have bounced up and down.
For 15-year mortgages, a popular option for refinancing, rates declined to 4.87 percent this week – also the lowest since July 11 – and down from 4.96 percent last week.
Rates for one-year adjustable mortgages decreased to 3.53 percent, compared with 3.57 percent last week. This week’s rate was the lowest since the week ending July 4.
“Mortgage rates this week are at seven-month low and teetering on the 45-year low levels of last summer,” said Freddie Mac’s chief economist Frank Nothaft. “This is good news for housing, as low mortgage rates make homeownership more available to a broader segment of society.”
A year ago, rates on 30-year mortgages averaged 5.84 percent, 15-year mortgages were 5.21 percent and one-year adjustable mortgages stood at 3.81 percent.
The nationwide averages for mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.
Home sales reached record high levels in 2003 powered by low mortgage rates that proved too good for buyers to pass up. Sales of both previously owned homes and new ones should have their second best year ever in 2004, some economists say.
The Mortgage Bankers Association said its gauge tracking mortgage loan applications for home purchases and refinancings increased by 4.9 percent last week from the previous week, helped out by lower mortgage rates.
Send your real estate news items to Mike Benbow, Business editor, The Herald, P.O. Box 930, Everett, WA 98206, by fax at 425-339-3435, or by e-mail at economy@heraldnet.com
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