August 10, 2007 in Business

Mortgage rates sink to lowest since June

Associated Press The Spokesman-Review
 

WASHINGTON — Rates on 30-year mortgages sank this week to their lowest point in two months, a dose of good news for people thinking about buying a home.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.59 percent. That was down from 6.68 percent last week and was the lowest since early June, when rates stood at 6.53 percent.

The moderation is a piece of welcome news for prospective homebuyers, some of whom also have been faced with a situation of harder-to-get credit. In mid-June, rates on 30-year mortgages had climbed to 6.74 percent, an 11-month high.

Mortgages rates have ebbed as recent stock market turbulence has prompted investors to plow money into bonds, driving down rates on bonds. That, in turn, has pushed down rates on mortgages, which have eased amid signs the economy is growing gradually and hiring has cooled off a bit. The unemployment rate inched up to 4.6 percent in July, a six month high.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, also moved lower this week. They dropped to 6.25 percent, from 6.32 percent last week. Rates on one-year adjustable-rate mortgages also fell to 5.65 percent, compared with 5.69 percent last week.

However, rates on five-year adjustable-rate mortgages, rose this week to 6.33 percent, from last week’s average of 6.29 percent.

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 0.4 point. Five-year and one-year ARMs each carried an average fee of 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.55 percent.


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