Mortgage rates fall after rising 4 straight weeks

McLEAN, Va. (AP) – April 16, 2010 – Rates for long-term mortgages dropped this week but still remained above 5 percent, Freddie Mac said Thursday.

The average rate on a 30-year fixed rate mortgage was 5.07 percent this week, down from 5.21 percent a week earlier, a survey by the mortgage financier Freddie Mac said. Last week’s average rate for a 30-year fixed mortgage had been the highest since mid-August, when it was 5.29 percent.

Rates had dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended at the end of March, but the Fed left the door open to reviving the program if the economy weakens.

Low rates make mortgages less expensive for homebuyers.

“After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low,” said Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often tracking the interest rate paid on long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.40 percent, down from 4.52 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 4.08 percent, down from 4.25 percent a week earlier. Rates on one-year, adjustable-rate mortgages dipped to 4.13 percent from 4.14 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 15-year loans, 0.6 of a point for 30-year and 5-year loans, and 0.5 of a point for 1-year loans.

Copyright © 2010 The Associated Press. All rights reserved.

tags: ,