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Rates on 30-Year Mortgages Drop to Another New Low

May 30, 2003|From Associated Press

Rates on 30-year mortgages have dropped to a new low, the eighth time this year that has happened.

Average interest on a fixed-rate 30-year mortgage fell to 5.31% this week, the third week in a row this benchmark mortgage hit a record weekly low, Freddie Mac, the mortgage firm, reported Thursday in its nationwide survey.

Last week's 5.34% rate had been the previous low since 1971. Records that reach back further indicate the rate is the lowest in more than four decades, economists said.

Low mortgage rates propelled home sales to record levels last year. And this year is shaping up to be the second-best for sales of existing and new homes, economists say.

The housing market is one of the few bright spots of the lackluster economy.

"Low rates combined with the uptick in consumer confidence are strong indications that the housing market will continue to prosper into the summer months," said Frank Nothaft, Freddie Mac's chief economist.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates remained unchanged at 4.73% this week, the lowest since Freddie Mac began tracking them in 1991.

Rates for one-year adjustable mortgages, however, nudged up to 3.63% from 3.61%.

These mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.

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