NEW YORK (CNN/Money) -
Long- and short-term mortgage rates fell again this week due to continued lack of inflation worries, with the average one-year adjustable-rate mortgage hitting its lowest point in more than eight years, economists said Thursday.
Freddie Mac reported that the 30-year mortgage averaged 6.71 percent in the week ending June 7, with an average of 0.7 point payable up front to the lender. The rate slid from last week's average of 6.76 percent. The 30-year mortgage averaged 7.20 percent a year ago.
The 15-year fixed-rate mortgage averaged 6.18 percent, down from 6.22 percent last week and down from 6.74 percent a year ago. The 15-year averaged 0.7 point payable up front.
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In addition, one-year adjustable-rate mortgages indexed to the Treasury dipped to 4.71 percent, with an average 0.5 of a point due up front, down slightly from 4.76 percent last week and down from an average of 5.85 percent a year ago. The one-year ARM has not been lower since April 1994 when it averaged 4.65 percent.
"Mortgage rates have been under 7 percent for the past eight weeks," Freddie Mac chief economist Frank Nothaft said. "During that time, mortgage applications for home purchases have continued to reach historically high levels, keeping home sales moving at a vibrant pace." (Read more about increasing the retail value of a home.)
Nothaft added that housing continues to be a solid investment, evidenced by Freddie Mac's Conventional Home Price Index, which showed the price of homes rebounded to an annualized growth rate of 5.7 percent in the first quarter.
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Freddie Mac (FRE: down $0.60 to $63.90, 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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