NEW YORK (CNN/Money) -
Mortgage rates will enter the new year at historic lows, as concerns about a war with Iraq and rising tensions over North Korea's nuclear program kept pressure on borrowing rates.
Freddie Mac reported Thursday that the 30-year mortgage rate averaged 5.93 percent, with an average of 0.6 of a point payable up front to the lender, in the week ending Dec. 27. The last time the 30-year hit this level was in 1965, according to the firm.
Click here to compare real estate agents
The 30-year rate fell from an average 6.03 percent last week and remained below its 7.16 percent average of a year ago.
The 15-year fixed-rate mortgage averaged a 5.32 percent interest rate, down from 5.42 percent last week and down from 6.65 percent last year. The 15-year level matches the lowest rate ever recorded, which was also hit in November of this year.
The 15-year mortgage averaged 0.6 of a point payable up front to the lender.
One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, averaged 4.01 percent. The one-year ARM slipped from 4.07 percent last week and averaged 0.6 of a point payable up front. A year ago, the one-year ARM averaged 5.25 percent. The one-year ARM fell to the lowest level since Freddie Mac began tracking it in 1984.
|Calculators: Your Home
Freddie Mac chief economist Frank Nothaft said, "2002 was and amazing year in the housing sector. The annual average for the 30-year fixed-rate mortgage rate this year was about 6.5 percent, the lowest annual average in more than 31 years. That was the primary factor that led to an incredible amount of home building, home sales, and refinancing, all of which helped keep the economy from another recession."
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 $300,700 limit.
Freddie Mac (FRE: down $0.18 to $59.85, 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.