News & Events
Publication Date:
9/11/2008
Mortgage Rates Hit 5 Month Low
http://www.msnbc.msn.com/id/7148582/
WASHINGTON - Rates on 30-year mortgages
dropped sharply this week, falling to the lowest level in five months,
as the government’s dramatic takeover of mortgage giants Fannie Mae and
Freddie Mac had the hoped-for impact of lowering mortgage rates. Freddie
Mac reported Thursday that its nationwide survey found that 30-year,
fixed-rate mortgages dipped to 5.93 percent this week, down from 6.35
percent last week. The
sharp decline pushed the 30-year rate below 6 percent for the first
time since late May and marked the lowest level for this rate since
they averaged 5.88 percent the week of April 17.
Private
economists had predicted that the government’s move on Sunday to take
control of Fannie Mae and Freddie Mac would result in lower mortgage
rates for consumers because it removed a huge uncertainty about the
future of the two firms, which own or guarantee half of the nation’s
mortgages. Mark
Zandi, chief economist at Moody’s Economy.com, said Thursday that he
believed rates could keep falling and perhaps drop to around 5.5
percent on the 30-year mortgage, which would give a further boost to
the battered housing market. “This
is the most significant positive benefit of the government takeover of
Fannie and Freddie,” Zandi said. “I think it is important that rates
have fallen below the key 6 percent benchmark and hopefully rates will
move lower in coming weeks.” The 30-year mortgage hit a high for this year at 6.63 percent on July 24 and had been above 6 percent since late May. The Freddie Mac survey showed that other mortgage rates declined this week although one-year rates bucked the downward trend. Rates
on 15-year, fixed-rate mortgages, a popular choice for refinancing,
fell to 5.54 percent, down from 5.90 percent last week. Rates on five-year, adjustable-rate mortgages averaged 5.87 percent this week, down from 5.97 percent last week. One-year, adjustable-rate mortgages edged up to 5.21 percent, compared to 5.15 percent last week. The
mortgage rates do not include add-on fees known as points. The
nationwide fee for 30-year, 15-year and five-year mortgages averaged
0.7 point last week. The nationwide fee for one-year mortgages averaged
0.6 point this week. A
year ago, rates on 30-year mortgages stood at 6.31 percent, 15-year
mortgage rates averaged 5.97 percent, five-year adjustable-rate
mortgages were at 6.17 percent and one-year adjustable-rate mortgages
stood at 5.66 percent.
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