30-year fixed mortgage rates chart
updated 12/19/2003 9:51:08 AM ET 2003-12-19T14:51:08

Rates on 15- and 30-year mortgages fell to their lowest level in more than two months this week as government data showed a near-absence of inflation at the consumer level, financing giant Freddie Mac reported in its weekly survey Thursday.

The average rate on 30-year, fixed-rate mortgages fell to 5.82 percent this week, down from 5.88 percent the previous week, Freddie Mac said. The benchmark rate was the lowest since early October.

For 15-year fixed-rate mortgages, a popular option for refinancing, the average rate dropped to 5.14 percent, down from 5.24 percent last week.

Borrowers paid an average fee of 0.7 percent -- a so-called point fee -- to close their loans, according to the survey.

Fixed-rate mortgage rates -- while still well above their historic mid-June lows -- have been declining in recent weeks as bond prices have rallied in response to news about low inflation. The inflation news has helped inspire a bond market rally helped along by fresh indications that the Federal Reserve has no plans to raise short-term rates in the near future.

The government reported this week that prices of consumer goods excluding food and fuel have risen only 1.1 percent over the past 12 months. That was the lowest rate of "core" inflation reported in 38 years.

"Everyone is looking for inflation to appear, but no one seems able to find it," said Frank Nothaft, Freddie Mac chief economist.

"Thus with no inflationary pressure mortgage rates have continued to slip for the past few weeks, and we expect to see no big change in rates anytime in the foreseeable future," he said in a statement.

He also noted that the government reported an unexpected spike in housing starts last month to the highest rate in nearly two decades.

"I think it’s fair to say the outlook for the housing industry remains exceptional for the coming new year," Nothaft said.

Rates for one-year adjustable mortgages were unchanged at 3.77 percent, where they have remained for four straight weeks.

Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com