Rates on 30-year mortgages dipped to the lowest level in nearly four months this week, providing more support for the housing market.
Rates on 30-year fixed-rate mortgages averaged 5.85 percent this week, down from 5.99 percent last week, Freddie Mac said Thursday in its weekly nationwide survey. The rate is the lowest level for 30-year mortgages since early April.
Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13. Since then, rates have slowly drifted downward, reflecting in part what Federal Reserve Chairman Alan Greenspan has called a "soft patch" in economic activity in June.
Analysts attributed this week's drop to the government report last Friday that the country created only 32,000 jobs in July, far below the 200,000 jobs analysts had forecast.
"Last Friday's unexpectedly weak employment report caused interest rates on long-term Treasury bonds and, by extension mortgage rates, to fall as investors worried about the health of the U.S. economy," said Amy Crews Cutts, deputy chief economist at Freddie Mac. She noted that the decline in mortgage rates occurred even though the Federal Reserve boosted a key short-term rate by a quarter-point on Tuesday while at the same time providing an assessment that the current slowdown should be temporary.
This week's Freddie Mac survey showed that rates on 15-year fixed-rate mortgages, often used for refinancing, averaged 5.24 percent, down from 5.40 percent last week. Rates for one-year adjustable-rate mortgages were unchanged at 4.08 percent.
The nationwide averages for mortgage rates do not include add-on fees known as points. All three classes of mortgages carried an average 0.6 point fee this week.
A year ago, rates on 30-year mortgages averaged 6.31 percent, with 15-year mortgages at 5.46 percent and one-year ARMs at 3.80 percent.
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