Mortgage rates fall amid weak economic data

30 year mortgage rates
Average rates on 30-year fixed mortgages fell to 4.22% this week, down from a 2013 high of 4.58% in August.

Mortgage rates fell significantly this week amid weaker-than-expected economic reports, according to a weekly survey by Freddie Mac.

The average rate for a 30-year, fixed-rate loan, the most popular mortgage product, fell to 4.22% from 4.35% last week, Freddie Mac reported. Meanwhile, average rates on 15-year, fixed-rate loans, typically used for refinancing higher interest mortgages, dropped to 3.27% from 3.35% the week before.

This week's drop was one of the steepest during a year of mostly rising rates. The 30-year started 2013 at 3.34% and reached a high of 4.58% in August.

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Frank Nothaft, Freddie's chief economist said fixed mortgage rates fell amid reports of weaker manufacturing growth, with industrial production declining by 0.1% in October, below expectations. He also cited declines in the overall inflation rate, noting that the consumer price index saw its "smallest increase since October 2009" last month.

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Weighing on mortgage rates long-term is the Fed's stimulus program -- known as quantitative easing -- which entails that it buy $85 billion in bonds each month. The impending appointment of Janet Yellen as Fed chairman, who has defended the QE3 policy, has many believing the Fed's policy will remain in place.

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"Ms. Yellen would likely continue the QE policies started under Chairman Bernanke until there was very clear evidence that the economy would thrive, not just endure, without them," said Keith Gumbinger, a spokesman for, a mortgage information company.

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