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Long-term mortgage rate falls to 5.56%
30-year loan drops to lowest level since April '04, Freddie Mac says; lowers end-of-year forecast.
June 9, 2005: 11:30 AM EDT

NEW YORK (CNN/Money) - Long-term mortgages fell to the lowest rate since April 1, 2004, mortgage finance firm Freddie Mac said Thursday.

The rate on 30-year, fixed-rate loans averaged 5.56 percent this week, with an average 0.6 point payable upfront, down from last week's average of 5.62 percent, according to the mortgage finance firm's survey.

A year ago, the 30-year fixed-rate loan averaged 6.30 percent.

Freddie Mac said the average for the 15-year mortgage edged lower to 5.14 percent this week from 5.20 percent the previous week, with an average 0.5 point payable upfront.

The 15-year loan averaged 5.67 percent this time last year.

"The May employment report came in at less than half of what was expected last month, which pushed bond yields -- and mortgage rates -- down further," said Frank Nothaft, Freddie Mac vice president and chief economist.

"Consequently, markets are now speculating whether the Fed will continue raising rates at the same pace that it has been, or will it begin to moderate the frequency of its actions.

"Taking into consideration the fact that mortgage rates have fallen from the earlier peak at the end of March, we have lowered our forecast for long-term rates. We now expect that the 30-year fixed-rate mortgage rates will likely end up somewhere between 5.9 percent and 6.2 percent by the end of this year," Nothaft added.

Five-year, adjustable-rate mortgages slipped to an average 5.01 percent this week, with an average 0.5 point payable up front, down from last week's average of 5.10 percent.

There is no data available for year-over-year comparisons since Freddie Mac only began tracking these rates this year.

One-year, adjustable-rate mortgages also fell to average 4.21 percent this week, with an average 0.7 point payable up front, down from the previous week when it averaged 4.26 percent.

At this time last year, the one-year adjustable-rate loan averaged 4.14 percent.

Click here for more on the Mortgage Bankers Association's forecast for 30-year mortgages.  Top of page

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