30-Year Mortgage Rates Fall Below 6%
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Saturday, November 29, 2008
Rates on 30-year mortgages sank for a fourth straight week, falling below 6 percent for the first time since early October, and are heading lower because of the government's massive new effort to aid the U.S. housing market.
Further drops are likely, analysts said, reflecting the market's positive response to the programs the Federal Reserve and the Treasury unveiled this week to fight the financial crisis.
The Fed's move to spend up to $600 billion buying mortgage-backed securities owned or guaranteed by mortgage-financing titans Freddie Mac and Fannie Mae caused rates to immediately drop by a half-point. Economists say the new Fed program should help keep rates low as the government increases efforts to battle the credit crisis.
Freddie Mac reported Wednesday that rates on 30-year fixed-rate mortgages dropped to 5.97 percent this week. That was down from 6.04 percent last week. It was the first time rates have been below 6 percent since they were at 5.94 percent the week of Oct. 9.
Freddie Mac's survey is normally collected from Monday through Wednesday and released on Thursdays. This week, it was put out one day early due to the Thanksgiving holiday. Since some lenders reported their rates Monday, this week's rates don't reflect the full impact of the Fed's dramatic action.
Rates on other types of mortgages were mixed this week.
For 15-year, fixed-rate mortgages, which are popular with people who are refinancing, rates averaged 5.74 percent, up slightly from 5.73 percent.
Rates on five-year, adjustable-rate mortgages dipped to 5.86 percent, compared with 5.87 percent. Rates on one-year, adjustable-rate mortgages dropped to 5.18 percent, from 5.29 percent.
AWARDS: . . . Karen Cleveland, executive director of Habitat for Humanity of Northern Virginia, received the 2008 Excel Award from the Center for Nonprofit Advancement, for outstanding nonprofit leadership in the Washington area. . . . ACQUIRED: Long & Foster Insurance Agency Inc., the insurance arm of real estate firm Long & Foster Cos., acquired two independent local insurance agencies, MY Insurance Agency of Falls Church and Cryst & Associates of Fairfax. Both offices will close and the companies will operate from Long & Foster's headquarters in Chantilly.
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