NEW YORK (CNN/Money) -
Mortgage rates fell for the sixth consecutive week as the 30-year mortgage and 15-year mortgage hit record lows amid slumping consumer confidence and the uncertainty of war in Iraq.
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The 30-year fixed-rate mortgage (FRM) dropped to a record low of 5.79 percent for the week ending Feb. 28, down from 5.84 percent the prior week and well below the 6.80 percent average in place a year ago. An average 0.6 point was payable up front to the lender.
Meanwhile, the 15-year fixed-rate mortgage averaged 5.14 percent, down from last week's average of 5.21 percent, and hit a new low 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, rebounded slightly after reaching a new low last week. The ARM averaged 3.83 percent, up from 3.81 percent last week, with an average 0.6 point payable up front. Last year at this time, the one-year ARM averaged 4.94 percent.
"Debilitating forces, such as looming war clouds in the Mideast, declining consumer confidence and other issues, are making an economic rebound difficult," said Freddie Mac chief economist Frank Nothaft. "And when the economy is weak, interest rates tend to follow suit."
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Freddie Mac (FRE: up $0.31 to $54.60, 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.
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