September 17, 2009

Mortgage rates decline in week

Interest rates for 30-year, fixed-rate U.S. mortgages edged lower in the week ended Thursday, the Federal Home Loan Mortgage Corp. said.

The 30-year, fixed-rate mortgage averaged 5.04 percent with an average 0.7 points in the week, Freddie Mac said.

A week ago, 30-year, fixed-rate mortgages averaged 5.07 percent. A year ago, they averaged 5.78 percent.

The average interest rates for 30-year, fixed-rate loans have not been this low since May 28, Freddie Mac said.

At 4.47 percent with an average 0.6 points, the 15-year, fixed-rate average also declined, dropping from the previous week's average of 4.5 percent, the lowest rate since the bank began keeping track in 1991.

Interest rates for fixed-rate mortgages eased for the third consecutive week and remained at three-month lows, said Frank Nothaft, Freddie Mac vice president and chief economist.

Low mortgage rates are aiding new home construction. Housing starts for single family homes have increased consecutively over the past five months ending in July, although starts eased slightly in August, he said.