30-year mortgage rates drop to 5-week low

[October 24, 2008]  WASHINGTON (AP) -- Rates on 30-year mortgages dropped sharply this week, falling to the lowest level in five weeks.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.04 percent this week, down from 6.46 percent last week. The sharp decline pushed 30-year rates down to the lowest level since they stood at 5.78 percent the week of Sept. 18.

Analysts attributed the decrease to an easing of inflation concerns which now have been replaced with rising worries that the country could be headed for a prolonged recession. Interest rates generally fall in periods of economic weakness.

Rates on 30-year mortgages hit a high for the year of 6.63 percent in late July and then dropped below to a seven-month low of 5.78 percent the week of Sept. 18.

According to the Freddie Mac survey, rates on other types of mortgages were mixed this week.

Rates on 15-year fixed-rate mortgages, which are popular with people who are refinancing, fell to 5.72 percent, compared to 6.14 percent last week.

Rates on five-year adjustable-rate mortgages fell to 6.06 percent, down from 6.14 percent last week. However, rates on one-year adjustable-rate mortgages rose to 5.23 percent, up from 5.16 percent last week.

The mortgage rates do not include add-on fees known as points. The nationwide fee for 30-year, 15-year and five-year mortgages averaged 0.6 point. One-year mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 6.33 percent, 15-year mortgage rates averaged 5.99 percent, five-year adjustable-rate mortgages were at 6.03 percent and one-year adjustable-rate mortgages stood at 5.66 percent.

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On the Net:

Freddie Mac: http://www.freddiemac.com/

[Associated Press; By MARTIN CRUTSINGER]

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