Mortgage Rates Drop… Lowest in 10 Months

Courtesy: The Times of Northwest Indiana

Mortgage rates around the country fell this week, with rates on 30-year mortgages sinking to their lowest level in 10 months.

Freddie Mac, the mortgage company, reported Wednesday that 30-year, fixed-rate mortgages averaged 6.18 percent for the week ending Nov. 22. That’s down from 6.24 percent last week and was the lowest rate since the week ending Jan. 26, when 30-year mortgage rates averaged 6.12 percent.

It marked the second week in a row that mortgage rates dropped, a development that economists attributed to easing inflation pressures. Inflation is calming down amid stabilizing energy prices, slower overall economic activity and the housing slump.

“Slower growth usually means less inflation and less inflation means lower interest rates. Hence, the drop in mortgage rates this week,” said Frank Nothaft, Freddie Mac’s chief economist.

After five years of booming activity, the housing market has lost its sizzle this year. Sales have fallen, home builders have cut back on construction and home prices have lost considerable altitude, falling in some markets or rising more slowly in others.

The housing slump was the major culprit behind the slower economic growth rate that was logged in the late summer.

All categories of mortgage rates surveyed by Freddie Mac showed declines this week — offering some welcome news to those wanting to buy a home.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 5.91 percent. That’s lower than last week’s rate of 5.94 percent.

For one-year adjustable rate mortgages, rates fell to 5.49 percent, compared with 5.53 percent last week.

Five-year adjustable rate mortgages dropped to 5.99 percent this week, from 6.04 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 0.5 point. One-year and five-year ARMs each carried a fee of 0.6 point.

A year ago, 30-year mortgages averaged 6.28 percent. Fifteen-year mortgages stood at 5.81 percent, one-year ARMs were at 5.14 percent and five-year ARMs averaged 5.75 percent.

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