News Of Weaker Job Market Pushes Mortgage Rates Lower -Freddie

Mortgage rates fell this week following the news of a weaker job market, which "may slow consumer spending and keep inflation at bay," Freddie Mac's chief economist Frank Nothaft said on Thursday.

The 30-year fixed-rate mortgage averaged 5.03% for the week ending March 12, down from last week's 5.15% average, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 6.13% a year ago.

"The 30-year fixed-rate mortgage rate remains very close to January's all time recorded low of 4.96%. Indeed, mortgage rates have drifted up and down only by about one-quarter of a percent in the first months of this year," Nothaft said in a news release.

The 15-year fixed-rate mortgage averaged 4.64% this week, down from last week's 4.72% average. The mortgage averaged 5.60% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.99%, down from last week's 5.08% average. The 5-year ARM averaged 5.58% a year ago.

One-year Treasury-indexed ARMs averaged 4.80%, down from last week's 4.86% average. The ARM averaged 5.14% a year ago.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, the five-year ARM required an average 0.6 point and the 1-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.

"Given the recent historically low mortgage rates, homeowners have a strong incentive to try and refinance," Nothaft said. "For instance, the Bureau of Economic Analysis reports that the effective mortgage rate for loans outstanding in the fourth quarter of 2008 was around 6.2%, or almost 1.2 percentage points above this week's average rate for 30-year fixed-rate mortgages."

According to results of another survey by the Mortgage Bankers Association, mortgage application volume rose 11.3% last week.