DOW JONES NEWSWIRES
Mortgage rates fell this week as the average rate on 30-year
fixed-rate mortgages remained below 5%, according to Freddie Mac's
(FRE) weekly survey of mortgage rates.
Mortgage rates have fallen in recent months as providers try to
entice buyers amid the housing market downturn and the federal
government's commitment to buy hundreds of billions of dollars
worth of mortgages. But many consumers are wary of making the
commitment to purchase a home - and many prospective buyers face
challenges getting financing amid the tight credit market.
The 30-year fixed-rate mortgage averaged 4.82% for the week
ended Thursday, down from last week's 4.87% average and 5.88% a
year ago.
Rates on 15-year fixed-rate mortgages were 4.48%, down from
4.54% last week and 5.4% a year earlier. This week's rate was the
lowest the 15-year fixed has been since Freddie Mac began tracking
it in August 1991.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 4.88%, down from 4.93% last week and below their 5.48%
average a year ago. One-year Treasury-indexed ARMs were 4.91%, up
from 4.83% last week but down from 5.1% last year.
To obtain the rates, the fixed-rate mortgages and the 5-year ARM
required payment of an average 0.7 point and the 1-year ARM
required an average 0.5 point. A point is 1% of the mortgage
amount, charged as prepaid interest.
"The housing industry is starting to exhibit some positive
signs, albeit scarce and too early to tell how permanent," said
Freddie Mac chief economist Frank Nothaft. He added the Federal
Reserve reported earlier this week that better-than-expected buyer
traffic led to increased home sales of late in a number of
areas.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com