Rates on 30-year mortgages edge down slightly

WASHINGTON — Rates on 30-year mortgages edged down this week, the first decline after six straight increases, according to a nationwide survey.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year fixed-rate mortgages averaged 6.58 percent, down from 6.59 percent last week, which had been the highest level in nearly four years.

It marked the first drop in 30-year rates after six consecutive weekly increases. Analysts attributed the decline to last week’s unemployment report, which showed payrolls grew by just 138,000 in April.

That was the smallest monthly payroll gain in six months and eased fears in financial markets that the economy was growing so quickly that the Federal Reserve might keep raising interest rates through the summer.

The Fed did raise rates, as expected, for a 16th consecutive time at this week’s meeting. But policy-makers left their options open for a possible pause in the two-year string of rate hikes this summer if the economy shows signs of slowing.

Frank Nothaft, chief economist at Freddie Mac, cautioned that mortgage rates could rise again next week if reports on consumer and wholesale prices re-ignite concerns about inflation.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, also fell this week, dropping to 6.17 percent, from 6.22 percent last week.

One-year adjustable rate mortgages dipped to 5.62 percent this week, down from 5.67percent last week.

Rates on five-year, hybrid adjustable-rate mortgages averaged 6.22 percent this week, up slightly from 6.21 percent last week.