NEW YORK (CNN/Money) -
Mortgage rates hovered near recent lows this week, with the one-year adjustable rate mortgage falling to a record and giving home owners the opportunity to refinance their homes at lower rates, mortgage finance firm Freddie Mac said Thursday.
For the week ended March 25, the one-year adjustable rate mortgage (ARM) averaged 3.36 percent, with 0.6 of a point payable up front, versus 3.39 percent the previous week. A year earlier it averaged 3.84 percent. This marks the lowest level for the ARM since Freddie Mac began tracking it in 1984.
However, longer-term rates edged higher. The rate on 30-year fixed-rate mortgages averaged 5.40 percent, with an average 0.7 point payable up front, up from the previous week when it averaged 5.38 percent.
The 30-year averaged 5.91 percent a year earlier.
The 15-year mortgage inched up to 4.70 percent, also with 0.7 of a point payable up front, from 4.69 percent a year earlier. A year ago it was 5.21 percent.
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"Low mortgage rates continue to fuel the housing market, making homeownership more attainable to a broader segment of families," said Frank Nothaft, Freddie Mac chief economist.
"As evidence of this, we have seen mortgage applications rise for the last two months and home sales have picked up speed. And with the weather getting better, we should see housing sales strengthen even more in the near term. As long as general inflation remains in check, we expect mortgage rates will stay in their current range, and that will leave open the window of opportunity for refinancers and potential home buyers."
However, in its final assessment of fourth-quarter gross domestic product, the government reported Thursday that its core personal consumption deflator, one of the Federal Reserve's favorite measures of inflation, was revised up to show a 1.2 percent rise from the original 0.7 percent gain.
The low level of the core PCE deflator was one of the grounds the central bank had cited for being patient in raising interest rates even while growth and commodity prices held strong.
Freddie Mac's average mortgage rates are based on a survey of 125 lenders nationwide.
Freddie Mac (FRE: down $0.33 to $58.87, 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 popular as an alternative to government-backed bonds, notably with international investors.