Mortgages Rates Sink
Wednesday, November 21st 2007, 11:16 am
By: News On 6
WASHINGTON (AP) _ Mortgage rates sank this week, with rates on 30-year mortgages dropping to a six-month low, a spot of welcome news to would-be home buyers.
Freddie Mac, the mortgage company, reported Wednesday, that 30-year, fixed-rate mortgages averaged 6.20 %. That was down from 6.24 % last week and was the lowest rate since the week ending May 10, when rates stood at 6.15 %.
Other mortgage rates also fell.
Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, slid to 5.83 %, from 5.88 % last week. This week's rate hasn't been lower since the week ending Feb. 2, 2006, when 15-year rates averaged 5.81 %, the mortgage company said.
For five-year adjustable-rate mortgages, rates fell to 5.88 %, down from 5.96 % last week. This week's rate hasn't been lower since the week ending May 3, when 5-year rates averaged 5.87 %, Freddie Mac said.
Rates on one-year adjustable-rate mortgages dropped to 5.42 %, compared with 5.50 % last week. The rate on one-year ARMs hasn't been lower since late March, when rates averaged 5.40 %.
The moderation in mortgage rates around the country provides a dose of good news for prospective home buyers, some of whom also may be facing a situation of harder-to-get credit. But the easing in mortgage rates doesn't change housing's overall bleak picture.
``The housing market remains weak, continuing to be a drag on the economy,'' said Frank Nothaft, Freddie Mac's chief economist.
The mortgage rates do not include add-on fees known as points. Thirty-year, 15-year and five-year mortgages each carried a nationwide average fee of 0.5 point. The one-year ARM carried an average fee of 0.6 point.
A year ago, 30-year mortgages stood at 6.18 %. Rates on 15-year mortgages were at 5.91 % a year ago, while five-year ARMS averaged 5.99 % and one-year ARMs were at 5.49 %.
The housing market has been suffering through a severe slump, following five-years of heady activity. Sales turned weak as did home prices. The problems in housing are expected to persist well into next year.
The boom-to-bust situation has been especially hard on homeowners with spotty credit and lower incomes. Foreclosures and late payments have surged. Overstretched borrowers in some cases have been stuck with mortgages that eclipse the value of their homes. Borrowers that took out adjustable-rate mortgages with low introductory ``teaser'' rates have been socked when those loans reset to much higher rates.