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30-Year Mortgages Fall to New 2007
Low
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) -- Rates on 30-year mortgages fell to
the lowest level since mid-December as investors scrambled
to the safety of bonds following last week's stock market
turmoil.
Mortgage giant Freddie Mac reported Thursday that 30-year,
fixed-rate mortgages averaged 6.14 percent this week,
down from 6.18 percent last week.
The decline pushed 30-year rates down to the lowest
point since they averaged 6.13 percent the week of Dec.
21. Other rates dropped as well.
Analysts said the declines reflected the big 416-point
plunge in the Dow Jones industrial average last week.
The stock market turbulence sent investors fleeing to
the safety of bonds, which meant the yields on those
bonds - which determine mortgage rates - fell.
"Mortgage rates slid further in the past week to
the lowest level this year as volatility in overseas
stock markets led to questions about implications for
the U.S. economy," said Frank Nothaft, chief economist
at Freddie Mac.
Nothaft said he believed the economy would strengthen
as the year moves forward and this would leave 30-year
mortgages moving in a narrow range of between 6.3 percent
and 6.4 percent.
The Freddie Mac survey showed that other types of mortgage
rates hit their lowest points for the year as well.
Rates on 15-year, fixed-rate mortgages, a popular choice
for refinancing, fell to 5.86 percent, down from 5.92
percent last week.
Five-year adjustable rate mortgages edged down to 5.90
percent, compared to 5.93 percent last week.
One-year ARMs dipped to 5.47 percent, down from 5.49
percent last week.
The mortgage rates do not include add-on fees known
as points. Thirty-year mortgages, 15-year and five-year
mortgages all carried a nationwide average fee of 0.5
point while one-year mortgages carried an average fee
of 0.6 point.
A year ago, rates on 30-year mortgages stood at 6.37
percent while 15-year mortgages were at 6.00 percent,
five-year adjustable rate mortgages averaged 6.03 percent
and one-year ARMs were at 5.45 percent.
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