NEW YORK (CNN/Money) -
Mortgage rates fell for the eighth consecutive week and again reached record lows as heightening tensions at the United Nations over an armed conflict in Iraq continued to pressure the U.S. economy.
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The 30-year fixed-rate mortgage (FRM) set a record low for the fifth time in 2003 as it came in at 5.61 percent for the week ending March 14. This is down from 5.67 percent the prior week and well below the 7.08 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 4.93 percent, down from last week's average of 5.01 percent, and again hit a new low since Freddie Mac started tracking it in 1991. An average of 0.5 point was payable up front. A year ago, the 15-year FRM averaged 6.59 percent.
The one-year adjustable rate mortgage (ARM), loosely indexed to the 10-year Treasury note, hit another record low as well. The ARM averaged 3.68 percent, down from 3.76 percent last week, with an average 0.6 point payable up front. Last year at this time, the one-year ARM averaged 5.08 percent.
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"The escalating tensions within the U.N. over the impending resolution on Iraq and dismal economic news this week sent the stock market tumbling and with it went bond and mortgage rates," said Freddie Mac chief economist Frank Nothaft. "The high volatility is likely to remain for a while. But since there are no upward pressures at the moment, any sustained rise in rates in highly unlikely."
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Freddie Mac (FRE: up $1.46 to $53.33, 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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