Home Loan Rates Fall Slightly

Mortgage rates offered more mixed signals this week, with longer-term rates easing slightly, Freddie Mac reported Thursday, citing widespread cooling of inflationary fears.
The average rate on 30-year fixed-rate home loans was 6.15 percent for the week ending May 10, down from 6.16 the week before, the government-backed mortgage finance firm said.

Last year at this time, 30-year home mortgage rates - the industry’s most common and benchmark financing product - were significantly higher, coming in at an average of 6.58 percent.

“Low employment growth in April - the slowest pace since November 2004 - and downward revisions to both February and March job growth tempered market concerns of future increases in the rate of inflation,” Frank Nothaft, Freddie Mac V.P. and chief economist, said.

“As a result, mortgage rates were little changed this week.”

Analysts also noted that mortgage refinancing continued to rise throughout the country as residents look to refinance home loans despite the slowdown in home prices.

In the first quarter of 2007, Americans borrowed $70.5 billion in the form of home equity loans, down from $77 billion in the previous quarter.

Earlier this week, the National Association of Realtors said home prices would likely finish lower for the year, marking the first drop since the group started tracking values in 1968.

The rate on 15-year home loans averaged just 5.87 percent, unchanged from the previous week, Freddie Mac said.

A year ago, the 15-year mortgage - always a popular mortgage refinancing option - was .30 percent higher, or 6.17 percent.

Five-year adjustable-rate mortgages eased to 5.89 percent up from 5.87 percent last week. The five-year ARM averaged 6.22 percent a year ago.

The average one-year adjustable-rate mortgage averaged 5.48 percent, up from 5.42 percent the previous week.

At this time last year, this home mortgage loan product averaged 5.62 percent.

SOURCE: CNN Money