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Personal Finance > Your Home
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Mortgage rates drift lower
Anticipation of rate cut by Fed keeps rates low; one-year ARM hits lowest level since February 1994.
November 14, 2002: 10:37 AM EST

NEW YORK (CNN/Money) - Anticipation of an interest rate cut pushed rates for long- and short-term mortgages lower this week, and the Fed's larger-than-expected move is expected to drive rates even lower in coming weeks, mortgage lender Freddie Mac said Thursday.

Freddie Mac reported that the 30-year mortgage averaged 6.11 percent with an average of 0.6 of a point payable up front to the lender for the week ending Nov. 8. The rate fell from an average 6.13 percent last week and remained below its 6.45 percent average a year ago.

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The 15-year fixed-rate mortgage averaged 5.48 percent, down from 5.51 percent last week and from 5.94 percent last year. The 15-year mortgage averaged 0.6 of a point payable up front to the lender.

One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, averaged 4.15 percent, hitting the lowest level since Feb. 4, 1994. The one-year ARM dropped from 4.25 percent last week and averaged 0.7 of a point payable up front. A year ago, the one-year ARM averaged 5.30 percent.

"Recent economic indicators show a lackluster economic climate," Freddie Mac chief economist Frank Nothaft said. "And that led to the surprise 50-basis-point rate cut by the Fed yesterday."

"Anticipation of a 25-basis-point rate cut pushed mortgage rates downward in this week's survey, and we expect to see further downward drifts over the coming week or so as the market moves on the actual larger rate cut itself," Nothaft added.

Freddie Mac's average mortgage rates are based on a survey of 125 lenders nationwide. The rates include those on mortgages accepted by borrowers with good credit ratings who place a 20 percent down payment on their homes, according to Freddie Mac. The total amount of each mortgage considered for the survey doesn't exceed a $300,700 limit.

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Freddie Mac (FRE: up $0.50 to $58.45, Research, Estimates), or Federal Home Loan 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.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.