November 24, 2005 in Business

Mortgage rates fall for the first time in 11 weeks, boosting prospective home buyers

Associated Press

WASHINGTON — Mortgage rates around the country, which have been trending upward, dropped this week, offering a dose of good news for prospective home buyers.

Mortgage giant Freddie Mac reported Wednesday in its weekly survey that rates on 30-year, fixed-rate mortgages averaged 6.28 percent. That’s down sharply from last week’s rate of 6.37 percent, which was the highest in more than two years and marked the 10th week in a row that rates on 30-year mortgages rose.

Analysts attributed the decline in mortgage rates this week to reduced fears on the part of investors about inflation getting out of control.

“Lower oil prices — at least compared to the last several months — have helped to alleviate some of the inflation fears that the market has been experiencing lately,” said Frank Nothaft, Freddie Mac’s chief economist.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.81 percent this week, down from 5.90 percent last week.

One-year adjustable rate mortgages dipped to 5.14 percent, compared with 5.20 percent last week. Rates on five-year hybrid adjustable rate mortgages averaged 5.75 percent this week, down from 5.86 last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.6 point; one-year ARMs had a 0.7 point and five-year hybrid ARMs carried a fee of 0.8 point.

A year ago, 30-year mortgages averaged 5.72 percent, 15-year mortgages were at 5.15 percent and one-year ARMs averaged 4.27 percent. Freddie Mac does not have historical data on the five-year ARM which it began tracking this year.

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