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Mortgage Rates Hit Record Lows

June 06, 2003|From Associated Press

Mortgage rates around the country tumbled to new lows this week, good news for people looking to buy homes or refinance.

The average rate on 30-year fixed-rate mortgages dropped to 5.26% for the week ending June 5, Freddie Mac, the mortgage giant, reported Thursday in its weekly nationwide survey.

It marked the fourth straight week and the ninth time this year that the rate on this benchmark mortgage has fallen to an all-time weekly low.

The previous low rate of 5.31% was set last week. The new rate marks the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier indicate that the rate is the lowest in more than four decades, economists said.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates fell to a record low of 4.66% this week. That undercut last week's rate of 4.73%. This week's rate was the lowest level since Freddie Mac began tracking 15-year mortgages in 1991.

Rates for one-year adjustable mortgages declined to a new low of 3.59%, down from last week's 3.63%. Freddie Mac's records on one-year ARMs go back to 1984.

The drop in mortgage rates has "led to a new flood of mortgage applications," said Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Assn. of America.

"While almost 77% of the applications are for refinances, applications for mortgages for purchasing homes are also hitting record levels as buyers move to lock in these low rates."

This week's mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried an average fee of 0.5 point this week, while one-year ARMs carried an average fee of 0.6 point.

A year ago, rates on 30-year mortgages averaged 6.71%, 15-year mortgages were 6.18% and one-year adjustable mortgages stood at 4.71%.

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