Rates drop for 30-year mortgages

WASHINGTON – Rates on 30-year mortgages declined this week after posting increases for six consecutive weeks.

In its weekly survey, mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages fell to 5.8 percent, down from last week’s 5.89 percent, which had been the highest level in four months.

Analysts said the small decline reflected an assessment in financial markets that such factors as surging energy prices might dampen economic growth a bit going forward.

“Mortgage rates can fluctuate from week to week depending on market conditions and expectations,” said Frank Nothaft, Freddie Mac’s chief economist.

He said conditions remained positive for the red-hot housing market to continue at high levels of sales activity in the months ahead.

“Long-term mortgage rates are at about the same low level they were at this time last year so it isn’t surprising that the housing industry continues to thrive,” Nothaft said.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.4 percent this week, down from 5.47 percent last week.

Bucking the downward trend, rates on one-year adjustable rate mortgages edged up to 4.58 percent from 4.57 percent last week. Both levels were the highest for one-year ARMS in more than three years, since they averaged 4.66 percent in mid-July 2002.

Rates on five-year hybrid adjustable rate mortgages averaged 5.34 percent this week, down from 5.4 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Both the 30-year and 15-year mortgages carried an average fee of 0.5 point this week.

Five-year mortgages were carrying an average fee of 0.6 point while one-year ARMS had a fee of 0.7 point.

A year ago, 30-year mortgages averaged 5.81 percent, 15-year mortgages were at 5.19 percent and one-year ARMs averaged 4.01 percent.

Freddie Mac does not have historical data on the five-year ARM, which it began tracking just this year.