Mortgage rates fall on housing market slowdown

NEW YORK (CNNMoney.com) -- Mortgage rates fell in the past week as lenders showed concern for the effect the slowing housing market would have on the economy, according to a survey released Thursday.

The 30-year fixed rate mortgage averaged 6.22 percent, down from 6.30 percent last week, according to Freddie Mac's (down $0.06 to $66.03, Charts) Primary Mortgage Market Survey.

Last year at this time, the 30-year averaged 6.26 percent.

"Mortgage rates eased a little more this week, as market participants were concerned over how much drag the slowing housing market may have on economic growth," said Frank Nothaft, Freddie Mac vice president and chief economist.

"Last week's release of housing starts for January showed the weakest reading since August 1997, due to the abundance of homes already on the market to purchase," he said.

The 15-year rate averaged 5.97 percent, down from 6.03 percent last week. A year ago it averaged 5.89 percent.

The 5-year adjustable rate mortgage averaged 5.96 percent, down from 6.01 percent last week. Last year it was 5.32 percent.

The 1-year ARM averaged 5.49 percent, down from 5.52 percent last week. Last year it averaged 5.32 percent.

Nothaft said next week's release of new and existing home sales should offer a more complete gauge of the housing industry's strength.

"In addition, the second estimate of economic growth in the fourth quarter of 2006 will be released next week and should further provide insight into what extent the housing market is affecting the economy," Nothaft said.

---------------------------------------------

Home buying: Buy now? Or wait for a price drop?

A $5,000,000 home of one's own