Mortgage Rates Largely Down On Week; 30-Year Fixed At 5.07%

Mortgage rates generally fell again this week, with the average rate on 30-year fixed-rate mortgages retreating closer to 5%, according to Freddie Mac's (FRE) weekly survey of mortgage rates.

After yields on Treasurys rebounded from multi-decade lows during the spring and early summer - bringing mortgages rates along with them - Treasurys have rallied of late as investors question the pace of an economic recovery.

National Association of Realtors data last week showed that pending home sales climbed to the highest level in more than two years, while new-home sales having climbed five in the latest seven months. Indeed, Frank Nothaft, Freddie chief economist, said Thursday the low rates contributed to a 17% jump in mortgage applications over the previous week, as refinancing demand jumped 23%.

The 30-year fixed-rate mortgage averaged 5.07% for the week ended Thursday, down from last week's 5.08% average and 5.93% a year ago. Rates on 15-year fixed-rate mortgages were 4.5%, down from 4.54% last week and 5.54% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.51%, down from last week's 4.59% and 5.87% a year earlier. One-year Treasury-indexed ARMs were 4.64%, up from 4.62% last week but down from 5.21% a year earlier.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point. The five-year adjustable-rate mortgages requred an average 0.5 point and the one-year ARMs, an average 0.6 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]