Rates on 30-year mortgages fell sharply this week to the lowest level in eight months, reflecting easing inflation concerns.
Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages dipped to 6.24 percent, down from 6.33 percent last week. The decline pushed rates to the lowest level since March 2 when they also stood at 6.24 percent.
Analysts attributed this week’s drop to further good news on inflation as both consumer and wholesale prices registered big drops.
“Both long and short-term mortgage rates fell this week on early signs the threat of inflation may be waning,” said Frank Nothaft, chief economist at Freddie Mac.
He said that the falling mortgage rates should help cushion the downturn in housing. Sales have fallen sharply this year after setting records for five consecutive years.
“We’ve probably seen the worst of the housing slump although it may not have entirely bottomed out yet,” Nothaft said.
The big slump in housing trimmed economic growth by more than 1 percentage point in the third quarter.
All categories of mortgage rates surveyed by Freddie Mac showed declines this week.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 5.94 percent, down from 6.04 percent last week.
Rates on one-year adjustable rate mortgages dipped to 5.53 percent, down from 5.55 percent last week.
Five-year adjustable rate mortgages dropped to 6.04 percent from 6.08 percent last week.
The mortgage rates do not include add-on fees known as points. All four categories of mortgages carried a nationwide average fee of 0.5 point.
A year ago, 30-year mortgages averaged 6.33 percent while 15-year mortgages stood at 5.90 percent, one-year ARMs were at 5.20 percent and five-year ARMs were at 5.86 percent.