Mortgages
Rates on 30-year mortgages dropped for a fourth straight week to the lowest level in nearly four years, raising hopes that low rates will help spur a rebound in the hard-hit housing industry.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.48 percent this week, down from 5.69 percent the previous week.
It was the fourth consecutive decline and the third straight week that rates have been below the 6 percent level. The new rate marked the lowest point for 30-year mortgages since they averaged 5.40 percent the week of March 25, 2004.
Economists attributed the decline to further weak news on the economy combined with the biggest reduction of a key interest rate by the Federal Reserve in more than 20 years, a move that has raised hopes the Fed will be making more rate cuts as it steps up its efforts to combat a threatened economic recession.
Rates on 15-year mortgages, a popular choice for refinancing, dropped to 4.95 percent this week, down from 5.21 percent last week.
Rates on five-year adjustable-rate mortgages declined to 5.13 percent, compared to 5.40 percent last week while rates on one-year ARMs fell to 4.99 percent, down from 5.26 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages, 15-year mortgages and five-year adjustable-rate mortgages all carried a nationwide average fee of 0.4 point. One-year ARMS had an average fee of 0.6 point.
A year ago, 30-year mortgages stood at 6.25 percent while rates on 15-year mortgages were at 5.98 percent. Five-year ARMs averaged 6.00 percent and one-year ARMs were at 5.49 percent this time a year ago.
Send 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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