30-Year Rates Fall Slightly to 4.82%
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Saturday, May 23, 2009
Rates on 30-year mortgages inched downward this week, remaining below 5 percent for the 10th consecutive week and just above record lows.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dipped slightly to 4.82 percent this week, down from an average of 4.86 percent last week.
Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said Wednesday that its index of application volume climbed 2.3 percent last week from a week earlier. Applications to refinance existing loans made up nearly 75 percent of all applications.
To revive the economy, mired in the worst slump in decades, the Federal Reserve has cut its key interest rate to a record low near zero and is expected to hold it there well into next year. The Fed also has turned to unconventional tools to lower interest long-term rates and spur spending, which would help bolster economic activity.
"They want to keep those long-term rates low, the mortgage rate in particular, to help facilitate a recovery in housing," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.
The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent this week from 4.52 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages dropped to 4.79 percent from 4.82 percent. Rates on one-year, adjustable-rate mortgages rose to 4.82 percent from 4.71 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages and 0.6 point for five-year and one-year adjustable rate loans.
