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Posted at 10:00 AM ET, 06/07/2012

Mortgage rates fall for the sixth consecutive week

Mortgage rates continued their six-week nosedive, reaching all-time record lows amid weak economic and job data, according to a report released Thursday by Freddie Mac.

The 15-year fixed-rate average dropped to 2.94 percent, the second consecutive week it has been under 3 percent and well below its mark of 3.68 a year ago. The 30-year fixed-rate fell to 3.67 percent, down from 3.75 percent a week ago. A year ago, it was 4.49 percent.
A house for sale in Logan Circle. (Andrew Harrer - BLOOMBERG)

Both hybrid adjustable-rate averages remained below the 3-percent barrier. The five-year was unchanged at 2.84 percent, and the one-year rose slightly to 2.79 percent.

Frank Nothaft, Freddie Mac’s vice president and chief economist, pointed to the Treasury bond market and pessimistic economic and job reports for causing the continuing drop of the rates.

“Fixed mortgage rates reached new record lows for the sixth consecutive week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data,” he said in a statement.

The low mortgage rates have enticed many homeowners to refinance their mortgages. According to a report released by the Mortgage Bankers Association on Wednesday, the number of mortgage applications increased 1.3 percent from the previous week. The refinance share of mortgage activity rose to 78 percent of total applications, the highest refinance share since Feb. 24. That means fewer than a quarter of all mortgages these days are used to buy homes.

In other mortgage news this week, Timothy J. Mayopoulos was named the new chief executive of Fannie Mae, the government-backed mortgage giant. Fannie Mae, along with Freddie Mac, own or guarantee a majority of the home loans in the United States. Their combined portfolios amount to nearly $5 trillion in assets.

Related: Home prices and rents on rise in Washington metro area

Affordability could be an issue in the Washington area

By  |  10:00 AM ET, 06/07/2012

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