Thursday, April 26, 2007

Mortgage rates dip slightly

WASHINGTON (AP) — Average rates on 30-year mortgages edged down for a second week as financial markets interpreted weakness in consumer confidence and home sales as evidence that the economy is still mired in a period of lackluster growth.

In its weekly survey, mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.16% nationwide this week, down slightly from 6.17% last week.

The 30-year rate is very close to its 2007 low, 6.14% in early March.

Analysts attributed the slight decline to reports showing that consumer confidence dropped in April to the lowest level in eight months while sales of existing homes fell by the largest amount in 18 years.

"Recent economic data ... caused the market to pause and re-evaluate the potential growth of the economy this year," said Frank Nothaft, chief economist at Freddie Mac. "This allowed all mortgage rates to decline slightly this week."

He noted that mortgage rates so far this year have been relatively stable with the 30-year fluctuating as high as 6.34% in early February and as low as 6.14% for the first two weeks in March.

Other mortgage rates also fell this week, Freddie Mac said.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, dipped to 5.87%, down from 5.89% last week.

Five-year adjustable-rate mortgages averaged 5.88%, compared with 5.92% last week. One-year adjustable-rate mortgages edged down to 5.43% from 5.45% last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages both carried a nationwide average fee of 0.5 points. Five-year and one-year ARMs carried an average fee of 0.7 points.

A year ago, rates on 30-year mortgages stood at 6.58% while 15-year mortgages were at 6.21%. Five-year adjustable-rate mortgages averaged 6.21% and one-year adjustable-rate mortgages were at 5.68%.

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