Rate on 30-year fixed-rate mortgages drops to another record low
Thursday, June 12th 2003, 12:00 am
By: News On 6
WASHINGTON (AP) _ Mortgage rates slid to new lows this week, good news for people looking to buy a home or refinance the one they already own.
The average rate on 30-year fixed-rate mortgages dropped to a record low of 5.21 percent for the week ending June 13, Freddie Mac, the mortgage giant, reported Thursday in its weekly nationwide survey.
It marked the fifth straight week and the tenth time this year that rates on this benchmark mortgage fell to an all-time weekly low.
This week's rate surpassed the previous low rate of 5.26 percent set last week. The new rate marks the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier indicate that the rate is the lowest in more than four decades, economists said.
Frank Nothaft, Freddie Mac's chief economist, said mortgage rates dipped this week in anticipation that the Federal Reserve will reduce short-term interest rates at its June 24-25 meeting.
For 15-year fixed-rate mortgages, a popular option for refinancing, rates fell to a record low of 4.60 percent this week, besting last week's rate of 4.66 percent, which had been the previous all-time weekly low. This week's rate was the lowest level since Freddie Mac began tracking 15-year mortgages in 1991.
Rates for one-year adjustable mortgages declined to a new low of 3.54 percent, down from last week's rate of 3.59 percent. Freddie Mac's records on one-year ARMs go back to 1984.
Low mortgage rates are keeping the housing market healthy and feeding a home-mortgage refinancing boom.
Refinancing activity accounted for 76.9 percent of all mortgage loan applications filed last week, up from 76.7 percent the week before, the Mortgage Bankers Association of America reported.
This week's mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried an average fee of 0.5 point this week, while one-year ARMs carried an average fee of 0.6 point.
A year ago, rates on 30-year mortgages averaged 6.71 percent, 15-year mortgages were 6.17 percent and one-year adjustable mortgages stood at 4.67 percent.