Mortgage rates around the country fell this week, with rates on 30-year mortgages dipping to the lowest level since January.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.14 percent, down from 6.18 percent last week. That was the lowest rate since the week of Jan. 26, when 30-year mortgage rates averaged 6.12 percent.
It marked the third straight weekly decline in rates, a development that economists attributed to easing inflation pressures as the overall economy slows, held back by a huge drop in housing activity.
Rates on 30-year mortgages have been steadily declining since they peaked at 6.80 percent in late July.
Frank Nothaft, chief economist at Freddie Mac, said those declines have now pushed long-term mortgage rates below where they were at this time last year and should help spur a rebound in housing.
“Mortgage applications for home purchases in November have remained healthy, largely because of the drop in mortgage rates and a softening in home prices in some areas,” he said.
After five years of booming activity, the housing market has cooled considerably this year. Sales have fallen and home builders have been scrambling to cut back on construction to deal with record levels of unsold homes.
The housing slump has been the major culprit behind a significant slowdown in the economy this year, shaving 1.16 percentage points from overall growth in the summer, when the economy expanded at an annual rate of just 2.2 percent.
All categories of mortgage rates surveyed by Freddie Mac showed declines this week.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 5.87 percent, down from 5.91 percent last week.
For one-year adjustable rate mortgages, rates fell to 5.46 percent, down from 5.49 percent last week.
Five-year adjustable rate mortgages dropped to 5.95 percent, compared with 5.99 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.4 point. One-year and five-year ARMs both carried a fee of 0.5 point.
A year ago, 30-year mortgages averaged 6.26 percent. Fifteen-year mortgages stood at 5.81 percent, one-year ARMs were at 5.16 percent and five-year ARMs averaged 5.76 percent.
Send 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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