Mortgage Rates Sink Further, Reach 10-Month Low

Mortgage rates around the U.S. fell over the course of last week, with the going rates on 30-year mortgages sinking to their lowest level in 10 months.

Freddie Mac, the government-backed mortgage company, reported that 30-year, fixed-rate mortgages averaged 6.18 percent for the week ending November 22. That’s down from 6.24 percent last week (pictured) and was the lowest rate since the week ending January 26, when 30-year mortgage rates averaged 6.12 percent.

It marked the second week in a row that mortgage rates dropped, according to the Washington Post. This is a development that economists attribute to easing inflation pressures. Inflation is calming down amid stabilizing energy prices, slower overall economic activity and the housing slump.

“Slower growth usually means less inflation and less inflation means lower interest rates. Hence, the drop in mortgage rates this week,” said Frank Nothaft, Freddie Mac’s chief economist.

After five years of record activity, the housing market has lost its sizzle this year. Sales have fallen, home builders have cut back on construction and home prices have lost considerable altitude, falling in some markets or rising more slowly in others. The housing slump is a major culprit behind the slower economic growth rate that was logged in the late summer.

All categories of mortgage rates surveyed by Freddie Mac showed declines this week — offering some welcome news to those wanting to buy a home.

• Rates on 15-year, fixed-rate mortgages, a popular choice for home mortgage refinancing, averaged 5.91 percent - a little bit lower than last week’s average rate of 5.94 percent.
• For one-year adjustable-rate mortgages, home loan rates fell to 5.49 percent, compared with 5.53 percent last week.
• Five-year adjustable-rate mortgages dropped to 5.99 percent this week, a decline from 6.04 percent last week.

The mortgage rates reported in this survey do not include the fees known as points. Thirty-year and 15-year mortgages each carried a national average fee of 0.5 points. One-year and five-year ARMs each carried a fee of 0.6 point. One year ago, 30-year mortgages averaged 6.28 percent. The 15-year mortgages stood at 5.81 percent, one-year ARMs were at 5.14 percent and five-year ARMs averaged 5.75 percent.