Rates on 30-year mortgages dropped this week to the lowest level in a month as financial markets viewed new evidence of a slowing economy as a sign that inflation will decline.
Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages dropped to 6.31 percent this week. That was down from 6.40 percent last week and represented the lowest level since 30-year rates were at 6.30 percent four weeks ago.
All categories of mortgages showed declines for the week, reflecting a batch of reports showing the economy slowing, a development that the Federal Reserve hopes will push inflation rates down to more acceptable levels.
The government reported last Friday that the overall economy, as measured by the gross domestic product, slowed to a sluggish growth rate of 1.6 percent in the July-September quarter, the weakest pace in more than three years.
Nothaft said the lower mortgage rates may trigger a spurt of refinancing by people who want to get out of adjustable rate mortgages that are scheduled to adjust upward over the next year.
After hitting records for five consecutive years, home sales and construction of new homes are down sharply this year, a slowdown that has been a major drag on the overall economy.
In an effort to dispell some of the gloom surrounding housing at present, the National Association of Realtors announced that it was beginning a series of newspaper ads proclaiming, “It’s a great time to buy or sell a home.”
The ads, which were to start appearing in newspapers on Friday, noted that mortgage rates have been falling recently and the near-record level of unsold homes means that buyers have more homes to choose from.
The ad quotes former Federal Reserve Chairman Alan Greenspan as saying that “most of the negatives in housing are probably behind us.”
Tom Stevens, the Realtors’ president, said, “The market is much better than you might hear or read.”
The Freddie Mac mortgage survey showed that rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.02 percent this week, down from 6.10 percent last week.
People
Nathan Gorton has been named executive vice president of the Snohomish County Camano Association of Realtors. Formerly the association’s governmental affairs director, Gorton will now serve as the organization’s administrator. He replaces Russ Hokanson, who recently took over as chief executive of the Seattle-King County Association of Realtors.
Send your real estate news 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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