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Fixed mortgage rates fall
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November 8, 2001: 12:40 p.m. ET
The 30-year and 15-year FRMs drop to their lowest points in years.
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NEW YORK (CNNmoney) - Mortgage rates dropped to their lowest points in years this week, with the 30-year fixed loan hitting its lowest point in at least 30 years while one-year adjustable-rate mortgages were up slightly from the previous week.
According to Freddie Mac, the benchmark 30-year fixed-rate mortgage dipped 0.11 percentage point from the previous week, which was down to 6.45 percent from 6.56 percent Nov. 2 and down from 7.79 percent in the same week last year.
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The average this week for the 15-year fixed-rate mortgage was 5.94 percent, a 0.10 percentage point drop from last week. A year ago, the same rate stood at 7.44 percent. The 15-year FRM hasn't hit this low in at least 10 years, according to Freddie Mac.
One-year adjustable-rate mortgages (ARMs) averaged 5.30 percent, up slightly from last week's 5.26 average. The same mortgage averaged 7.23 percent at this time last year.
"Friday's employment figures for October confirmed that the U.S. economy is indeed in a recession," said Robert Van Order, Freddie Mac chief economist. "That news, along with a slowdown in consumer spending and low consumer confidence, is having a drag effect on the economy, which allows mortgage rates to fall further."
Van Order added that the Federal Reserve Board's Tuesday interest-rate cut could allow mortgage rates to fall more in upcoming weeks and will likely cause one-year ARMs to slide next week. He said that long-term rates should hold at around 6.5 percent for the remainder of 2001.
[Click here for 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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