Mortgage rates dip with one-year ARM at lowest level on record

<br> <br>WASHINGTON (AP) _ Mortgage rates fell again this week, with the benchmark 30-year mortgages approaching last year's rates, which were the lowest in more than four decades. Rates for one-year

Thursday, March 18th 2004, 12:00 am

By: News On 6

WASHINGTON (AP) _ Mortgage rates fell again this week, with the benchmark 30-year mortgages approaching last year's rates, which were the lowest in more than four decades. Rates for one-year adjustable mortgages set a new record low.

The average rate on 30-year, fixed-rate mortgages dipped to 5.38 percent, mortgage giant Freddie Mac reported Thursday in its weekly nationwide survey of mortgage rates.

This week's rate was down from 5.41 percent last week and marked the lowest level for 30-year mortgages since the week ending June 27, when rates averaged 5.24 percent. The low point for 30-year mortgages since the early 1960s was 5.21 percent, reached in mid-June of last year.

``Mortgage rates this week are barely above the generational low levels we saw in June of last year,'' said Frank Nothaft, chief economist at Freddie Mac. ``We are currently predicting that this will fuel yet another record year for total home sales.''

For 15-year, fixed-rate mortgages, a popular option for refinancing, rates were unchanged at 4.69 percent, the same level as last week. Two weeks ago, 15-year mortgages averaged 4.88 percent.

Rates for one-year adjustable mortgages dipped to 3.39 percent, down from 3.41 percent the previous week. Both rates were at the lowest levels since Freddie Mac began tracking rates on one-year ARMs in 1984.

A year ago, rates on 30-year mortgages averaged 5.79 percent, 15-year mortgages were 5.11 percent and one-year adjustable mortgages stood at 3.75 percent.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried an average fee of 0.7 point this week, while one-year ARMs carried an average fee of 0.6 point.

Low mortgage rates powered home sales to record highs in 2003 and economists expects sales to be brisk for all of 2004.