Fixed-mortgage rates fall below 5%
Associated Press
1:58 PM CST, January 15, 2009
Rates on 30-year mortgages set a record for a fifth straight week by dropping to below 5 percent, the lowest mark since Freddie Mac started tracking the data in 1971.
Mortgage rates have been dropping since late November, when the Federal Reserve said it was going to pump money into the banking system by buying $500 billion in mortgage-backed securities to get banks to lend more money and perhaps aid the ailing U.S. housing market.
Freddie Mac reported Thursday that average rates on 30-year fixed mortgages dropped to 4.96 percent this week, down from the previous record of 5.01 percent established last week. It was the 11th straight weekly drop, and way below the rate of 5.69 percent at the same time last year.
Rates at are their lowest since the company started its survey in April 1971, Freddie Mac said.
Frank Nothaft, Freddie Mac’s chief economist, said mortgage rates have fallen as the Treasury Department and the Fed added more than $100 billion in liquidity to the mortgage market since September.
The average rate on a 15-year fixed-rate mortgage rose to 4.65 percent. That rate was 4.62 percent last week, the lowest point since June 2003, Freddie Mac said.
Average rates on five-year, adjustable-rate mortgages fell to 5.25 percent, the lowest since the week ending Sept. 8, 2005, when it averaged 5.24 percent, Freddie Mac said. Rates on one-year, adjustable-rate mortgages fell to 4.89 percent, down from 4.95 percent last week.
The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point for this week. Fees for five-year adjustable rate mortgages averaged 0.6 point, compared with 0.5 point for one-year adjustable-rate mortgages.
Freddie Mac, and sibling company Fannie Mae, own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.
