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NEW YORK (CNN/Money) - Mortgage rates fell last week, reinforcing the notion that inflation in the economy was contained.
The average rate on 30-year fixed-rate mortgages fell to 5.65 percent this week, with an average 0.6 point payable up front, from 5.71 percent last week, the government-chartered mortgage company Freddie Mac said.
Last year at this time, the rate on the 30-year fixed-rate loan stood at 6.32 percent.
The 15-year mortgage rate averaged 5.21 percent, with an average 0.6 point payable up front, down from 5.27 percent the week before. The loan averaged 5.69 percent a year ago.
"Release of the May Federal Open Market Committee (FOMC) minutes the week reinforced the notion that inflation in the economy in the first three months of the year was contained and upward price pressure in the near-term seems unlikely," said Frank Nothaft, Freddie Mac vice president and chief economist. "And when inflation is contained, mortgage rates decline.
"Housing continued to help fuel the economy this year, accounting for about 20 percent of real GDP growth in the first quarter alone. Further, since the end of March long-term bond yields have fallen by more than a half of a percentage point, allowing interest rates on fixed-rate mortgage to decline as well. Consequently, both new and existing home sales in April reached all-time record highs."
Five-year adjustable-rate mortgages (ARMs) averaged 5.07 percent, with an average 0.7 point payable up front, unchanged from the week before. There is no data available for a year-to-year comparisons since Freddie Mac only began tracking the 5-year loans this year.
One-year adjustable rate mortgages (ARMs) averaged 4.21 percent, with an average 0.7 point payable up front, down from 4.26 percent last week. At this time last year, the one-year ARM rate averaged 3.87 percent.
Click here for more on the new record for home sales.
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