Mortgage rates fell to the lowest level since February thanks to the ongoing impact of the Fannie and Freddie bailout, Freddie Mac reported today.
The average 30-year fixed-rate mortgage slipped to 5.78 percent this week, down from 5.93 percent a week earlier and considerably lower than the 6.34 percent average seen a year ago.
The 15-year fixed fell to 5.35 percent, down from 5.54 percent last week and 5.98 percent a year ago.
Adjustable-rate mortgages also saw substantial downward movement, with the five-year ARM sliding 20 basis points to 5.67 percent, and the one-year ARM falling to 5.03 percent from 5.21 percent a week earlier.
A year ago, the five-year averaged 6.21 percent and the one-year stood at 5.65 percent, but the loan programs still seem to be out of favor with most borrowers.
Freddie Mac chief economist Frank Nothaft said loan applications for ARMs have fallen by nearly 50 percent since the end of 2007, and during the first two weeks of this month, 95 percent of new apps were for fixed-rate loans.
Over the last month and change, the average rate on the 30-year mortgage has fallen about 0.75 percent, sparking a refinance frenzy not seen since late January.
Of course questions remain whether the increased applications seen last week will result in a significant number of closed loans.
And other reporting outlets like Bankrate.com are already seeing a rise in mortgage rates from earlier this week, a signal the rally may be short-lived.
(photo: amyb)
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