DOW JONES NEWSWIRES
Mortgage rates fell further this week, with the average rate on
30-year fixed-rate mortgages retreating deeper below 5% and several
others reaching fresh lows, according to Freddie Mac's (FRE) weekly
survey of mortgage rates.
After yields on Treasurys rebounded from the multi-decade lows
they hit earlier this year, they have since retraced, pulling down
mortgage rates with them.
Home sales have rebounded due to the drop in rates and in
prices, plus a $8,000 tax credit for first-time buyers. New-home
sales have gone up for five straight months, according to the
Commerce Department. Last week, National Association of Realtors
data showed pending home sales spiked much more than expected in
August, the seventh consecutive monthly increase to the highest
level in two years.
The falling rates are also spurring increased refinancing
activity, which reached a 19-week high last week.
The 30-year fixed-rate mortgage averaged 4.87% for the week
ended Thursday, the lowest since May. It compares with last week's
4.94% average and 5.94% a year ago.
Rates on 15-year fixed-rate mortgages were 4.33%, down from
4.36% last week and 5.63% a year earlier. The latest figure is the
lowest since Freddie began tracking such loans in 1991.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 4.35%, down from last week's 4.42% and 5.9% a year
earlier. Those loans haven't had such low average rates in the four
years Freddie has kept such data, while the average rate on
one-year Treasury-indexed ARMs ticked up to 4.53% from 4.49%. The
prior-year average was 5.15%.
To obtain the rates, the fixed-rate mortgages required payment
of an average 0.7 point and the adjustable-rate mortgages needed an
average 0.5 point. A point is 1% of the mortgage amount, charged as
prepaid interest.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com