30-Year Mortgage Rates Fall to 6.31%

Rates on 30-year mortgages dropped this week to the lowest level in a month as financial markets viewed new evidence of a slowing economy as a sign that inflation will decline.

Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages dropped to 6.31 percent this week. That was down from 6.40 percent last week and represented the lowest level since 30-year rates were at 6.30 percent four weeks ago.

All categories of mortgages showed declines for the week, reflecting a batch of reports showing the economy slowing.

Frank E. Nothaft, Freddie Mac's chief economist, said the lower mortgage rates may trigger a spurt of refinancing by people who want to get out of adjustable-rate mortgages that are scheduled to adjust upward over the next year.

"We are also seeing a higher number of homeowners who are taking cash out of their homes for home improvement or other needs rather than opting for a prime-rate home equity loan now that the prime rate is over 8 percent," Nothaft said.

After hitting records for five years, home sales and construction of new homes are down sharply this year, a slowdown that has been a major drag on the overall economy.

In an effort to dispel some of the gloom surrounding housing at present, the National Association of Realtors announced that it was beginning a series of newspaper ads proclaiming, "It's a great time to buy or sell a home."

The Freddie Mac mortgage survey showed that rates on 15-year, fixed-rate mortgages averaged 6.02 percent this week, down from 6.10 percent last week. Rates on one-year adjustable-rate mortgages fell to 5.53 percent, compared to 5.60 percent last week. Rates on five-year adjustable-rate mortgages dropped to 6.05 percent, down from 6.14 percent last week.

The mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages each carried an average nationwide fee of 0.4 point. The one-year ARM had a nationwide average fee of 0.6 point and the five-year ARM had an average fee of 0.5 point.

A year ago, 30-year mortgages averaged 6.31 percent, the same as this week, while 15-year mortgages stood at 5.85 percent, one-year ARMs were at 5.09 percent and five-year ARMs were 5.76 percent.

AWARDS . . . The Maryland-National Capital Building Industry Association recently presented annual awards to seven member companies. Four were for builders: Builder of the Year, small volume (under 25 units a year), Natelli Communities of Gaithersburg; Builder of the Year, medium volume (25 to 100 units a year), Mitchell & Best Homebuilders LLC of Rockville; Builder of the Year, large volume (100 to 300 units a year), Mid-Atlantic Builders Inc. of Rockville, and Builder of the Year, high volume (more than 300 units a year), Winchester Homes Inc. of Bethesda. Additionally, Elm Street Development Inc. of McLean was named Developer of the Year; Creative Touch Interiors of Landover was named Subcontractor/Supplier of the Year and Georgetown Insurance Service Inc. was named Associate of the Year.

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