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Mortgage rates drop to record lows
Rates drop for fifth straight week as 30-year, 15-year and one-year mortgages hit lows.
February 21, 2003: 11:13 AM EST

NEW YORK (CNN/Money) - Mortgage rates fell for the fifth consecutive week, and hit record lows, as investors continued to seek safe-haven debt despite a recent rebound in stock prices.

The 30-year fixed-rate mortgage (FRM) dropped to a record low of 5.84 percent for the week ending Feb. 21, down from 5.86 percent the prior week and well below the 6.81 percent average in place a year ago. An average 0.6 point was payable up front to the lender.

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Meanwhile, the 15-year fixed-rate mortgage averaged 5.21 percent, down from last week's average of 5.26 percent, and hit the lowest level since Freddie Mac started tracking it in 1991. An average of 0.6 point was payable up front. A year ago, the 15-year FRM averaged 6.28 percent.

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The one-year adjustable rate mortgage (ARM), loosely indexed to the 10-year Treasury note, moved lower after remaining unchanged for three-consecutive weeks and reached the lowest level since Freddie Mac began tracking it in 1984. The ARM averaged 3.81 percent, down from 3.89 percent last week, with an average 0.7 point payable up front. Last year at this time, the one-year ARM averaged 4.96 percent.

"Current record breaking low mortgage rates are keeping demand for housing strong, even as the overall economy stumbles sluggishly into the first part of the new year," said Freddie Mac chief economist Frank Nothaft.

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Freddie Mac (FRE: down $0.12 to $54.75, 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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