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Mortgage rates decline
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October 5, 2000: 2:50 p.m. ET
Long-term home loan interest at year-to-date low; no inflation threat seen
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NEW YORK (CNNfn) - Long-term mortgage rates slipped to their lowest level for the year as markets reacted to the non-action by the Fed at its latest policy meeting, according to a survey released this week by Freddie Mac.
The 30-year fixed-rate mortgage, the industry benchmark, averaged 7.83 percent for the week ending Oct. 6, tumbling from last week's average of 7.88 percent. A year ago it was 7.82 percent. The 30-year mortgage has not been this low since the week ended November 26, 1999, when it stood at 7.75 percent.
The average for a 15-year fixed-rate mortgage (FRM) was 7.50 percent, down from last week's average of 7.53 percent. A year ago the same rate stood at 7.43 percent. This was the lowest mark since the FRM averaged 7.47 percent for the week ended December 17, 1999.
 One-year adjustable-rate mortgages (ARMs) this week averaged 7.21 percent, unchanged from last week's average. The same mortgage averaged 6.27 percent a year ago.
[Click here to see a breakdown of U.S. mortgage rates by region.]
"Mortgage markets responded this week to expectations the Fed would take no action, thus signaling it sees no immediate threat of inflation," said Robert Van Order, chief economist for Freddie Mac. "Indications are that housing will continue to be a sound investment, even as the economy gently eases into the coming winter months.
"As a matter of fact, fixed-rate mortgage rates are at the lowest level of the year, making housing even more affordable," Van Order added.
Freddie Mac (FRE: Research, Estimates), or Federal Home Mortgage Corp., is a publicly traded company that the government established in 1970 to provide a flow of funds to mortgage lenders.
It buys mortgages from banks, bundles them, and then resells them as mortgage-backed securities. Its products, and the products of other similar entities, have become increasingly popular as an alternative to government-backed bonds, particularly with international investors. 
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Freddie Mac
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