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Mortgage rates dip slightly
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January 3, 2002: 1:43 p.m. ET
Rates remain steady as recovery, no inflation signs are seen on the horizon.
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NEW YORK (CNN/Money) - The 30-year fixed-rate mortgage changed little this week, as some economists claim the market has hit bottom and economic recovery is on its way.
According to Freddie Mac, the long-term mortgage averaged 7.14 percent in the week ending Jan. 4, with an average 0.8 point, dipping slightly from 7.16 percent last week. A year ago, the 30-year fixed-rate was at 7.07 percent.
The 15-year fixed-rate mortgage this week averaged 6.62 percent, with an average 0.8 point, down a bit from last week's 6.65 percent. The same mortgage stood at 6.74 percent during the year-ago week.
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At the same time, one-year adjustable-rate mortgages (ARMs) indexed to the Treasury averaged 5.26 percent this week, with an average 0.9 point, up slightly from last week's average of 5.25 percent. One-year ARMs averaged 6.86 percent at this time last year.
"Low mortgage rates and strong house appreciation boosted new and existing home sales as well as refinance activity (in 2001), leading to what was surely a record-breaking year for housing," said Frank Nothaft, chief economist at Freddie Mac. "Coming into the new year, there are some signs that the recession may have already run its course but no indications that inflation looms on the horizon. Thus mortgage rates remained almost unchanged this week."
He added that 2002 should be another good year for housing and that mortgage lending volumes for purchasing should remain in line with 2001 but that refinancing volume would decline.
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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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