Yahoo! News - Rates on 30-Year Mortgages Fall Again

Yahoo! News - Rates on 30-Year Mortgages Fall Again

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - Rates on 30-year mortgages fell for a sixth consecutive week as lower-than-expected employment gains helped keep the lid on inflation worries.

Freddie Mac's weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.57 percent for the week ending Feb. 10, down from 5.63 percent last week.

Low mortgage rates propelled sales of both new and existing homes to all-time highs in 2004, the fourth straight year that sales in both categories have set records.

Analysts are forecasting housing will enjoy another good year in 2005 with sales expected to decline by around 3 percent, a decline that would still give the country the second-highest levels for sales of new and existing homes.

Rates on 30-year mortgages have declined every week this year. The last weekly increase occurred in the final week of 2004. Frank Nothaft, Freddie Mac's chief economist, linked this week's decline to the January employment report which showed that businesses added a lower-than-expected 146,000 workers to their payrolls last month.

"Interest rates on 30-year fixed-rate mortgages have not risen above 6 percent in at least six months, which has helped to keep the housing market bustling," Nothaft said.

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, fell to 5.10 percent, down from 5.14 percent the previous week. Rates on one-year adjustable-rate mortgages dipped to 4.11 percent, down from 4.23 percent last week.

Five-year hybrid adjustable rate mortgages averaged 4.99 percent this week, down from 5 percent last week and the lowest level since Freddie Mac began tracking this rate at the beginning of this year. These hybrid mortgages have a fixed-rate for five years and then adjust each year after that.

The nationwide averages for mortgage rates do not include add-on fees known as points. The thirty-year and one-year mortgages each carried 0.8 point while the 15-year and five-year ARMs carried a fee of 0.7 point.

A year ago, rates on 30-year mortgages averaged 5.66 percent, with 15-year mortgages at 4.96 percent and one-year ARMs at 3.57 percent.