Rates on 30-year and 15-year mortgages moved down this week, good news for people interested in buying a home.
For the week ending Dec. 12, the average rate on 30-year, fixed-rate mortgages fell to 5.88 percent, down from 6.02 percent the previous week, Freddie Mac, the mortgage giant, reported Thursday in its weekly nationwide survey of mortgage rates.
Rates on 30-year mortgages slid to 5.21 percent, the lowest level in more than four decades, in the middle of June. Since then, rates on these benchmark mortgages have bounced up and down.
For 15-year fixed-rate mortgages, a popular option for refinancing, the average rate dropped to 5.24 percent, down sharply from 5.36 percent last week.
Rates for one-year adjustable mortgages, however, averaged 3.77 percent, unchanged for the third straight week.
A year ago, rates on 30-year mortgages averaged 6.04 percent, 15-year mortgages were 5.46 percent and one-year adjustable mortgages stood at 4.18 percent.
The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year loans carried an average fee of 0.7 point this week. Fifteen-year and one-year adjustable rate mortgages each carried an average fee of 0.6 point.
"Mortgage rates continue to be spectacularly low at present, especially when you consider that a generation ago, the 30-year fixed-rate mortgage rate was triple today's rates," said Freddie Mac's chief economist, Frank Nothaft.
Even with the recent gyration in mortgage rates, economists predict home sales will hit record highs this year and post their second-best year ever in 2004.
Separately, the Mortgage Bankers Association of America said refinancing accounted for 49.4 percent of all home-mortgage applications filed last week, down from 50 percent the previous week. The share of adjustable rate mortgages, however, increased to 29.3 percent last week, up from 26.6 percent.
"The drop in refinancings as a share of total loan originations is bringing to light the desire of many homebuyers to look at adjustable rate and hybrid loan products _ those where the rate is fixed for three to seven years _ as an alternative to traditional fixed-rate financing, particularly as short-term rates remain so low," said Jay Brinkmann, the association's vice president of research and economics.