NEW YORK (CNN/Money) -
Renewed signs that the Federal Reserve intends to keep interest rates at historically low levels in order to feed the economic recovery pushed mortgage rates to their lowest level since late July.
| Real Estate Resources
|
|
|
|
|
The 30-year mortgage rate fell to 6.01 percent in the week ending Sept. 19, with an average of 0.5 point payable up front, from 6.16 percent a week earlier. The 30-year stood at 6.05 percent at this time last year, according to mortgage finance firm Freddie Mac.
The 15-year fixed-rate mortgage dropped to 5.30 percent from last week's 5.46 percent rate and the 5.47 percent rate of a year ago. The 15-year averaged 0.5 point payable up front.
And the rate on one-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, also fell to 3.81 percent, with 0.6 point, from 3.87 percent last week; that rate is still below the year-ago rate of 4.28 percent.
"Financial markets are feeling more confident that the Fed will not raise rates any time soon. Add to that the fact that recent economic data shows core inflation is less than the market expects, and we see mortgage rates drop once again," said Frank Nothaft, Freddie Mac chief economist.
"And although refinancing has fallen off somewhat, home buying activity remains vigorous, unfazed by market chatter that the end of the housing boom is near," 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 $322,700 limit.
Freddie Mac (FRE: up $0.50 to $55.02, 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.
|
