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Freddie Mac: Mortgage rates set record low for sixth week in row

June 07, 2012|By E. Scott Reckard
  • Freddie Mac's headquarters in McLean, Va.
Freddie Mac's headquarters in McLean, Va. (Freddie Mac )

Mortgage rates fell to new lows for the sixth straight week, with lenders offering the 30-year fixed-rate loan at an average 3.67%, down from 3.75% a week ago, home finance giant Freddie Mac said.

The 15-year fixed-rate loan averaged 2.94%, down from 2.97% last week, according to Freddie's latest weekly survey.

Freddie Mac economist Frank Nothaft attributed the decline to reports showing weak growth in jobs and the economy. Those factors make inflation less likely and pressure central bankers to keep rates down.

The gross domestic product, originally reported as rising 2.2% during the first quarter, was cut back to 1.9%, Nothaft noted. What's more, the economy in May added fewer than half the jobs than had been expected.

Freddie Mac polls lenders each Monday through Wednesday on the terms they are offering solid borrowers on popular loans. In the latest survey, the borrowers would have paid 0.7% of the loan amount to the lenders upfront to obtain the fixed-rate loans.

The next survey appears likely to reverse the downward trend. The economic news has looked brighter over the last two days, sending stocks higher and driving up the yield on the 10-year Treasury note -- a benchmark for fixed mortgage rates -- from 1.47% last Friday to 1.66% Thursday morning.

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