February 8, 2008 in City

30-year mortgage rates fall

Associated Press The Spokesman-Review
 

WASHINGTON – Rates on 30-year mortgages dipped slightly this week, the fifth decline in the past six weeks.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.67 percent this week, down from 5.68 percent last week.

The 30-year mortgage, which ended last year at 6.17 percent, has been below 6 percent for five weeks, a stretch that has not been seen since 2005.

Analysts attributed the declines in mortgage rates to growing fears that the country could be slipping into a recession.

The Labor Department reported that businesses cut 17,000 jobs in January, the first monthly job loss since August 2003, while the Institute for Supply Management’s index for the service sector dropped sharply in January to the lowest level since October 2001.

“Economic news released in the past week showed that the economy continues to be weak,” said Frank Nothaft, chief economist for Freddie Mac.

Analysts are hoping that this low level for mortgage rates will help spur a rebound in the housing market, which suffered steep declines last year in sales of both new and existing homes.

Other mortgage rates also declined this week. Rates on 15-year mortgages, a popular choice for refinancing, dipped to 5.15 percent, compared with 5.17 percent last week.

Rates on five-year adjustable-rate mortgages declined to 5.21 percent, down from 5.32 last week.

One-year adjustable-rate mortgages fell to 5.03 percent, down from 5.05 percent.

A year ago, 30-year mortgages stood at 6.28 percent while rates on 15-year mortgages were at 6.02 percent.

Five-year adjustable-rate mortgages averaged 5.99 percent and one-year ARMs were at 5.49 percent this time a year ago.


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