Mortgage rates around the country dropped this week, with 30-year mortgages sinking to their lowest level in five months.
Freddie Mac, in its weekly survey released Thursday, reported that rates on 30-year, fixed-rate mortgages declined to 5.70 percent for the week ending Sept. 23. That was down from 5.75 percent last week and marked the best showing since rates on 30-year mortgages averaged 5.52 percent at the beginning of April.
Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13. Rates have slowly drifted downward as economic activity cooled in the late spring and early summer and inflation fears receded.
For 15-year, fixed-rate mortgages, a popular option for refinancing, rates decreased this week to 5.10 percent from 5.13 percent last week. Rates on one-year adjustable rate mortgages dipped to 4 percent, compared with 4.03 percent the previous week.
Mortgages rates have remained restrained even as the Federal Reserve has raised a key short-term interest rate. The Fed on Tuesday bumped up the target for its federal funds rate to 1.75 percent, marking the third rate increase since June. The funds rate is the interest banks charge each other on overnight loans and is the Fed’s main tool for influencing economic activity.
Economists say the Fed needs to slowly raise the funds rate from extraordinarily low levels to more normal levels to protect against inflation becoming a problem in the future.
Low mortgage rates “will all but guarantee that the housing industry will continue at its robust pace and set yet again another record for both new construction and overall home sales,” predicted Frank Nothaft, Freddie Mac’s chief economist.
The nationwide averages for mortgage rates do not include add-on fees known as points. Each mortgage type carried a 0.7 point fee.
A year ago, rates on 30-year mortgages averaged 6.01 percent with 15-year mortgages at 5.30 percent and one-year ARMs at 3.81 percent.
The Mortgage Bankers Association, meanwhile, said refinancing accounted for 44.5 percent of all home mortgage applications filed last week, up from 43.2 percent the previous week.
People
Ron Stewart has joined Legacy Senior Living LLC, a regional property management firm in Everett, as regional manager of operations. Stewart is a licensed nursing home administrator and has a degree in health care administration from Oregon State University.
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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