WASHINGTON (AP) – Rates on 30-year mortgages fell for a second straight week while other mortgage rates held steady.
The average interest rate on a fixed-rate 30-year mortgage dipped to 5.79 percent, Freddie Mac, the mortgage company, reported Thursday in its weekly nationwide survey. The rate was down from 5.82 percent last week.
In the week ending March 14, right before the United States went to war against Iraq, rates on 30-year mortgages declined to a record low of 5.61 percent as investors sought the safe haven of bonds during a period of heightened global tensions.
That rate was the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier indicate that the rate is the lowest since the early 1960s.
Low mortgage rates propelled home sales to record levels last year. Many economists believe interest rates will stay low for some months until economic growth rebounds to a faster rate.
“A tepid national economy has anchored mortgage rates to current low levels so far this year,” said Frank Nothaft, Freddie Mac’s chief economist. He said that according to the Federal Reserve’s survey of regional economic conditions, “the housing industry is the only bright spot in the economy right now.”
For 15-year fixed-rate mortgages, a popular option for refinancing, rates were unchanged this week at 5.12 percent, down from 5.17 percent two weeks ago.
Rates for one-year adjustable mortgages remained at 3.79 percent, down from 3.80 percent two weeks ago.
Low mortgage rates also sent home-mortgage refinancing activity to records levels last year, helping bolster consumer spending. Consumers used the money saved on their monthly mortgage payments to make other purchases.
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 6.88 percent, 15-year mortgages were 6.35 percent and one-year adjustable mortgages stood at 4.91 percent.
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On the Net:
Freddie Mac: http://www.freddiemac.com
AP-ES-04-24-03 1713EDT
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