DOW JONES NEWSWIRES
Mortgage rates fell again this week, bringing the average rate
on 30-year fixed-rate mortgages farther below 5%, according to
Freddie Mac's (FRE) weekly survey of mortgage rates.
The decline has been so much that the 30-year fixed rate is on
average lower than the one for a one-year adjustable loan. It also
happened last week as well, and it is the first time the yield
curve has reversed since Freddie began collecting data for
adjustable-rate mortgages in 1984.
Mortgage rates have fallen in recent months as providers try to
entice buyers amid the housing market downturn and the federal
government's plan to purchase 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.
But Freddie Mac Vice President and Chief Economist Frank Nothaft
said Thursday, "The housing market is showing further signs of
possible improvement. House prices rose for the second consecutive
month in February, the first back-to-back increase since April
2007," according to the Federal Housing Finance Agency.
The 30-year fixed-rate mortgage averaged 4.8% for the week ended
Thursday, down from last week's 4.82% and 6.03% a year ago. Rates
on 15-year fixed-rate loans were 4.48%, unchanged from last week
and down from 5.62% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 4.85%, down from 4.88% last week and well below their
5.68% average a year ago. One-year Treasury-indexed ARMs were
4.82%, down from 4.91% and 5.29%, respectively.
To obtain the rates, the fixed-rate mortgages and the five-year
ARM required payment of an average 0.7 point and the one-year ARM
required an average 0.5 point. A point is 1% of the mortgage
amount, charged as prepaid interest.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com