From The Times of Northwest Indiana – September 1, 2006
WASHINGTON — Rates on 30-year mortgages fell for a sixth consecutive week, providing home buyers with more relief from an earlier rise in rates.
Mortgage giant Freddie Mac said Thursday that 30-year, fixed-rate mortgages dipped to 6.44 percent this week, down from 6.48 percent last week.
That was the lowest level for 30-year mortgages since they averaged 6.43 percent the first week in April.
Mortgage rates hit a four-year high of 6.80 percent the week of July 20, before beginning a sustained decline as financial markets became more convinced that a slowing economy would keep inflation under control.
“Mortgage rates continued to drift lower this week in large part because of the cooling in the housing market and in consumer confidence, thus giving financial markets reason to believe that economic growth will moderate and inflation will remain in check,” said Frank Nothaft, chief economist at Freddie Mac.
Sales of both new and existing homes set records for five consecutive years through 2005 as buyers reacted to the lowest mortgage rates in more than four decades.
But sales activity has slowed this year with many analysts forecasting a decline in both new and existing home sales of around 10 percent.
The Federal Reserve at its last meeting on Aug. 8 left interest rates unchanged, breaking a two-year period of rate increases. Many private economists believe the central bank may be finished raising rates as long as inflation pressures remain reasonable.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.14 percent this week, down from 6.18 percent last week.
For one-year adjustable-rate mortgages, rates dipped to 5.59 percent, down from 5.60 percent last week.
Rates on five-year adjustable-rate mortgages fell to 6.11 percent this week, down from 6.14 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages and 15-year mortgages both carried a nationwide average fee of 0.4 point. One-year ARMS carried a nationwide average fee of 0.7 point while five-year ARMs carried a fee of 0.5 point.
A year ago, 30-year mortgages averaged 5.71 percent, 15-year mortgages stood at 5.32 percent, one-year ARMs were at 4.48 percent and five-year ARMs averaged 5.30 percent.