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Mortgage Rates Decline to Record Lows

June 13, 2003|From Associated Press

Mortgage rates slid to new lows this week, good news for people looking to buy a home or refinance the one they already own.

The average rate on 30-year fixed-rate mortgages dropped to a record low of 5.21% for the week ending today, mortgage company Freddie Mac reported Thursday in its weekly nationwide survey.

It marked the fifth straight week and the 10th time this year that rates on this benchmark mortgage fell to an all-time weekly low.

This week's rate surpassed the previous low rate of 5.26% 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.

Frank Nothaft, Freddie Mac's chief economist, said mortgage rates dipped this week in anticipation that the Federal Reserve would reduce short-term interest rates at its June 24-25 meeting.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates fell to a record low of 4.60% this week, besting last week's rate of 4.66%, which had been the previous all-time weekly low. 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 3.54%, down from last week's rate of 3.59%.

Freddie Mac's records on one-year ARMs go back to 1984.

Low mortgage rates are keeping the housing market healthy and feeding a home-mortgage refinancing boom.

Refinancing activity accounted for 76.9% of all mortgage loan applications filed last week, up from 76.7% the week before, the Mortgage Bankers Assn. of America reported.

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. 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 6.17% and one-year adjustable mortgages stood at 4.67%.

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