From News Services and Staff Reports
Saturday, May 17, 2008

Rates on 30-year mortgages edged down this week to their lowest point in a month.

The mortgage company Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.01 percent for the week. That was down from last week's 6.05 percent and was the lowest since mid-April, when rates averaged 5.88 percent.

Rates on adjustable mortgages also fell.

Five-year, adjustable-rate mortgages dropped to 5.57 percent from 5.67 percent. One-year ARMs fell to 5.18 percent from 5.29 percent.

However, rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, held steady at 5.60 percent.

The rate declines reflect hope on the part of investors that a recovery could be in sight for financial markets, which have been gripped by turbulence since last summer. Earlier this week, Federal Reserve Chairman Ben S. Bernanke said the turmoil has eased somewhat but the situation is still fragile.

"Recent remarks by Federal Reserve officials, which partly bolstered optimism that financial markets will recover later this year, helped mortgage rates ease up a little this week," said Frank E. Nothaft, Freddie Mac's chief economist. In addition, investors took comfort in recent barometers indicating that dangerous inflation levels are not taking hold, another factor helping ease mortgage rates, Nothaft said.

The moderation in some mortgage rates provides a dose of good news for prospective home buyers, some of whom also may be facing a situation of harder-to-get credit. But the easing in mortgage rates doesn't change housing's overall weak picture. Sales remain mired in a slump, as are home prices.

"The bottom line is that construction spending and house prices seem likely to continue to decline well into 2009," Janet Yellen, president of the Federal Reserve Bank of San Francisco, said in a speech earlier this week.

The mortgage rates do not include add-on fees known as points. The nationwide average fee for one-year, adjustable-rate mortgages was 0.7 point. For 30-year and five-year adjustable-rate mortgages, the nationwide average fee was 0.6 point. And the average fee for 15-year mortgages was 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.21 percent, 15-year and five-year mortgage rates averaged 5.92 percent, and one-year adjustables were at 5.48 percent.

AWARDS. . . The Arlington Partnership for Affordable Housing announced that it was named the best nonprofit small business of the year by the Arlington County Chamber of Commerce.

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