April 22, 2005 in Business

30-year mortgages drop again

Associated Press
 

WASHINGTON — Rates on 30-year mortgages fell for a third consecutive week as bond investors focused on a number of economic reports signaling a slowing economy.

Mortgage giant Freddie Mac reported Thursday in its weekly survey that rates on 30-year, fixed-rate mortgages averaged 5.80 percent this week, down from 5.91 percent last week.

It was the third straight decline since rates at the end of March hit 6.04 percent, the highest they had been since last July. The 30-year mortgage is at its lowest level since early March.

Analysts attributed this week’s decline to economic reports that raised concerns that this year’s spike in oil prices could be pushing the economy into another “soft patch” that would be a repeat of last year’s period of weakness.

“Interest rates in general have been oscillating with every piece of economic news released lately,” said Frank Nothaft, Freddie Mac’s chief economist. “The market is switching its focus between the strength of the economy and the fear of inflation.”

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, fell to 5.36 percent this week, down from 5.46 percent last week.

Rates on one-year adjustable-rate mortgages dropped to 4.26 percent, down from 4.30 percent last week.

Five-year hybrid adjustable rate mortgages averaged 5.22 percent this week, down from 5.31 percent last week. These hybrid mortgages have a fixed rate for five years and then adjust each year after that.

© Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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