Mortgage Rates Fall This Week; 30-Year Fixed At 4.87% -Freddie Mac

   DOW JONES NEWSWIRES 
 

Mortgage rates fell further this week, with the average rate on 30-year fixed-rate mortgages retreating deeper below 5% and several others reaching fresh lows, according to Freddie Mac's (FRE) weekly survey of mortgage rates.

After yields on Treasurys rebounded from the multi-decade lows they hit earlier this year, they have since retraced, pulling down mortgage rates with them.

Home sales have rebounded due to the drop in rates and in prices, plus a $8,000 tax credit for first-time buyers. New-home sales have gone up for five straight months, according to the Commerce Department. Last week, National Association of Realtors data showed pending home sales spiked much more than expected in August, the seventh consecutive monthly increase to the highest level in two years.

The falling rates are also spurring increased refinancing activity, which reached a 19-week high last week.

The 30-year fixed-rate mortgage averaged 4.87% for the week ended Thursday, the lowest since May. It compares with last week's 4.94% average and 5.94% a year ago.

Rates on 15-year fixed-rate mortgages were 4.33%, down from 4.36% last week and 5.63% a year earlier. The latest figure is the lowest since Freddie began tracking such loans in 1991.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.35%, down from last week's 4.42% and 5.9% a year earlier. Those loans haven't had such low average rates in the four years Freddie has kept such data, while the average rate on one-year Treasury-indexed ARMs ticked up to 4.53% from 4.49%. The prior-year average was 5.15%.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the adjustable-rate mortgages needed an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]