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Mortgage rates take a dive
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October 26, 2000: 1:41 p.m. ET
Volatile stock market, Middle East turmoil pressure home loan interest
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NEW YORK (CNNfn) - Mortgage rates fell steeply, pressured by a volatile stock market and unrest in the Middle East, according to a survey released by Freddie Mac this week.
The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.68 percent for the week ending Oct. 27, down sharply from last week's average of 7.83 percent. This is the lowest mark since the week ending November 12, 1999, when it averaged 7.67 percent. A year ago, the same mortgage averaged 7.96 percent.
The average this week for a 15-year fixed-rate mortgage was 7.36 percent, a drop from last week's average of 7.5 percent. The 15-year FRM has not been lower since the week ending November 19, 1999, when it averaged 7.31 percent. A year ago, the same rate stood at 7.57 percent.
 One-year adjustable-rate mortgages (ARMs) this week averaged 7.22 percent, edging down from last week's average of 7.25 percent. The same mortgage averaged 6.35 percent this time last year.
[Click here to see a breakdown of U.S. mortgage rates by region.]
"A volatile stock market and the troubles in the Mideast prompted a flight to quality that brought down bond rates, and mortgage rates followed," said Robert Van Order, chief economist for Freddie Mac.
"Although rates will probably rise for next week's survey, home buying continues to grow. Figures released today show that homeownership is at an all time high of 67.7 percent, highlighting the stability and affordability of the housing market," added Van Order.
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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