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Mortgage rates inch lower
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June 21, 2001: 1:28 p.m. ET
But analysts remain optimistic that housing sector would stay strong
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NEW YORK (CNNfn) - Mortgage rates inched lower for the third consecutive week as the pace of home building in the United States dipped in May.
The government reported that the housing market lost a little strength last month, but still was stronger than Wall Street forecasts as a bright spot in the sluggish economy continued to shine.
According to Freddie Mac, the benchmark 30-year fixed-rate mortgage (FRM) averaged 7.11 percent for the week ending June 22, down from last week's average of 7.14 percent. A year ago, the same mortgage averaged 8.14 percent.
The average this week for a 15-year fixed-rate mortgage was 6.65 percent, down from the previous week's average of 6.70 percent. A year ago, the 15-year rate averaged at 7.85 percent.
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One-year adjustable-rate mortgages (ARMs) averaged 5.74 percent, down from last week's average of 5.82 percent. The same mortgage averaged 7.22 percent at this time last year.
"Continuing low mortgage rates are contributing to a healthy economic outlook for housing in the coming months," said Frank Nothaft, Freddie Mac deputy chief economist. "With housing starts in May reported in excess of 1.6 million, all indications are that sales of new and existing homes will remain strong over the second half of this year.
"Along with May's housing numbers, the newly released higher-than-expected leading economic indicators also point to a strong third quarter for housing," Nothaft said.
[Click here to see a breakdown of U.S. mortgage rates by region]
Freddie Mac (FRE: Research, Estimates), or Federal Home Mortgage Corp., is a publicly traded company 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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