Rates on 30-year fixed-rate mortgages fell to their lowest point since September 2005, according to the weekly interest rate survey released by Freddie Mac this morning.
The average 30-year mortgage dipped to 5.87 percent from 6.07 percent last week, the lowest since averaging 5.80 percent in the week ended Sept. 22, 2005.
Fifteen-year mortgages also saw a huge improvement, falling 25 basis points to 5.43 percent from 5.68 percent last week.
Adjustable-rate mortgages also dropped, with the one-year averaging 5.37 percent, down from 5.47 percent, and the five-year down to 5.63 percent from 5.78 percent last week.
A year ago, 30-year mortgages averaged 6.21 percent, 15-year mortgages stood at 5.96 percent, the 5/1 ARM averaged 6.03 percent, and the one-year ARM was 5.44 percent.
Freddie Mac chief Frank Nothaft attributed the decline to a weak employment report released last Friday and the National Association of Realtors gloomy outlook for pending home sales in December.
Nothaft said, “these weak economic reports renewed concerns about economic conditions in the near future. As a result, mortgage rates came down across the board, with 30-year fixed mortgage rates at their lowest level in more than two years.”
“Because average mortgage rates have come down more than a quarter of a percentage point in the past two weeks, there has been a pickup in refinance activity as borrowers take advantage of the lower rates,” he added.
Yesterday, the Mortgage Bankers Association said refinance activity had surged 32.2 percent during the holiday shortened week ending January 4, 2008.
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