NEW YORK (CNN/Money) -
Mortgage rates fell further this week, as investors believe the Federal Reserve will manage to keep inflation in check, mortgage firm Freddie Mac said Thursday.
The average rate on 30-year fixed-rate mortgages fell to 5.67 percent this week, with an average 0.7 of a point payable up front, down from 5.74 percent last week. A year earlier, the rate on the 30-year fixed-rate loan stood at 5.64 percent.
The average 15-year mortgage rate eased to 5.15 percent, with a 0.7 percent payable up front, from last week's 5.19 percent. The rate averaged 4.95 percent a year ago.
"Financial markets see inflation as being well managed by the Fed, and that allows long-term interest rates to remain low, with mortgage rates even falling a little more this week," Freddie Mac vice president and chief economist Frank Nothaft said in a statement.
"With housing starts in December near record levels, and November starts revised upward, the housing industry looks like it will remain vibrant in 2005," he added.
Five-year adjustable-rate mortgages (ARMs) were unchanged from last week, averaging 5.05 percent this week, with an average 0.6 point. No data is available for a year earlier comparison.
Meanwhile, one-year ARMs ticked higher to 4.11 percent on average from 4.10 percent. The loans call for 0.6 of a point up front. At this time last year, the one-year ARM rate averaged 3.56 percent.
Freddie Mac's (down $0.85 to $68.56, Research) average mortgage rates are based on a survey of 125 lenders nationwide. Freddie Mac is a publicly traded corporation established by Congress to create a flow of funds to mortgage lenders to support of home ownership nationwide.