WASHINGTON (AP) – Mortgage rates around the country edged down this week, good news for the housing industry, one of the few bright spots in a mostly lackluster economy.
The average interest rate on a fixed-rate 30-year mortgage dipped to 5.82 percent for the week ending April 18, Freddie Mac, the mortgage company, reported Thursday in its weekly nationwide survey. This week’s rate was down from last week’s rate of 5.85 percent.
In the middle of March, rates on 30-year mortgages declined to a record low rate of 5.61 percent. That rate was the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier than Freddie Mac’s indicate that the rate is the lowest since the early 1960s.
Low mortgage rates propelled home sales to record levels last year. Some economists believe home sales this year could turn out to the second- or third- best year ever.
“Housing is poised for another exceptional year,” said Freddie Mac’s chief economist, Frank Nothaft. “For the year so far, mortgage rates have been continually under 6 percent as opposed to last year when rates averaged about a half percentage point higher.”
For 15-year fixed-rate mortgages, a popular option for refinancing, rates fell to 5.12 percent this week, compared with 5.17 percent last week.
Rates for one-year adjustable mortgages, nudged down to 3.79 percent, from 3.80 percent registered in the previous week.
Low mortgage rates also propelled home-mortgage refinancing activity to records levels last year. As consumers swap higher-interest rate home loans for lower-interest rate ones, the extra cash has helped to support consumer spending. So have rising home values.
But Federal Reserve Chairman Alan Greenspan expects the refinancing market to slow this year and home values to cool.
The Mortgage Bankers Association of America reported that refinancing accounted for 69.4 percent of all home mortgage applications filed last week, down from 70.3 percent the week before.
This week’s mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.
A year ago, rates on 30-year mortgages averaged 6.94 percent, 15-year mortgages were 6.42 percent and one-year adjustable mortgages stood at 4.95 percent.
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On the Net:
Freddie Mac: http://www.freddiemac.com
AP-ES-04-17-03 1405EDT
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