Associated Press
Saturday, November 15, 2008

Mortgage rates dropped for a second straight week, reflecting the weakening economy's impact on financial markets.

Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.14 percent this week, down from 6.20 percent last week. It continued the decline since rates tied a recent high of 6.46 percent two weeks ago.

Analysts attributed the back-to-back decreases to growing confidence that the Federal Reserve will cut rates again at its final meeting of the year in December in an effort to combat a severe slowdown, which many economists fear could deepen into a prolonged recession.

"Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide," said Frank E. Nothaft, chief economist for Freddie Mac.

Thirty-year mortgage rates hit a high for the year, 6.63 percent, in late July and then dropped to a seven-month low of 5.78 percent in mid-September.

Rates on other types of mortgages also fell this week, with the exception of one-year adjustable-rate mortgages.

For 15-year, fixed-rate mortgages, which are popular with people who are refinancing, the average rate dropped to 5.81 percent from 5.88 percent.

Rates on five-year, adjustable-rate mortgages fell to 5.98 percent from 6.19 percent. Rates on one-year, adjustable-rate mortgages edged up to 5.33 percent from 5.25 percent.

The mortgage rates do not include add-on fees known as points.

The nationwide average fee for 30-year and 15-year mortgages was 0.7 point this week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 6.24 percent, 15-year mortgage rates averaged 5.88 percent, five-year adjustables were at 5.96 percent and one-year ARMs stood at 5.50 percent.

HONORS . . . Home Builders Care Foundation, the charitable affiliate of the Maryland-National Capital Building Industry Association, was one of five builder associations honored recently for community service by the National Housing Endowment, an arm of the National Association of Home Builders. It was cited for its role in the rehabilitation of the 10-unit Dale Drive apartment complex for the Montgomery County Coalition for the Homeless. . . . Habitat ReStore of Northern Virginia, which resells donated building materials, was named Best Retail Business of the Year by the Alexandria Chamber of Commerce.

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