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Mortgage rates flat
Home loan rates stay at lowest level since mid-July on fears of weak fourth-quarter economic growth.
September 8, 2005: 11:36 AM EDT

NEW YORK (CNN/Money) - Mortgage rates remained near their lowest level in weeks as the disruption in economic activity brought on by Katrina fueled speculation of a slowdown in the last part of this year, Freddie Mac said Thursday.

The average rate on 30-year fixed-rate mortgages stayed flat for a second week at 5.71 percent for the week ending Thursday, according to the mortgage finance firm's survey.

Long-term mortgage rates are at their lowest level since the week ended July 16, when 30-year fixed-rate mortgage averaged 5.66 percent.

Last year at this time, the 30-year fixed-rate loan averaged 5.83 percent.

"We expect that near-term growth will now be a bit weaker than had been anticipated, due in very large part to the disruption in economic activity brought on by Katrina last week," said Frank Nothaft, vice president and chief economist at Freddie Mac.

"However, the federal monies that will flow into the damaged areas and the lower interest rates brought on by the disaster will stimulate economic growth next year, making up for the slowdown in the last part of this year."

The 15-year mortgage rate averaged 5.30 percent, down from 5.32 percent the week before. A year ago, the loan averaged 5.22 percent.

Five-year adjustable-rate mortgages (ARMs) averaged 5.24 percent, down from last week when it averaged 5.30 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.

One-year adjustable-rate mortgages edged down to average 4.45 percent from last week when it averaged 4.48 percent.

At this time last year, the one-year adjustable-rate loan averaged 4.00 percent.

"Reconstruction efforts are going to place upward pressure on construction material, and this could add another two percent to three percent to new home costs in the coming months, but should be balanced out by slightly lower mortgage rates," Nothaft said.

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Meanwhile, applications for residential mortgages rose last week, click here for more.  Top of page

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