Home Mortgage Rates Decline Slightly

Rates on 30-year mortgages - the industry benchmark loan - fell again this week, to 6.67 percent from 6.69 percent, according to a weekly survey.

Average rates on 15-year mortgages - a popular mortgage refinance option - also dropped, to 6.34 percent from 6.37 percent, while rates on one-year adjustable rate mortgages averaged 5.65, down from 5.66 percent.

Reports that existing home sales dropped in May as part of what Freddie Mac calls “the current housing market recession” helped mortgage rates ease.

The mortgage fixture also said the market is waiting to see if the Federal Reserve changes its policy at the conclusion of its Thursday meeting.

“Mortgage rates edged down slightly for the second straight week after a rise over the previous month and a half, and as markets prepared for the June 28 Federal Reserve statement on monetary policy,” Frank Nothaft, Freddie Mac chief economist and V.P., said.

On Monday, the National Association of Realtors reported that existing home sales in May fell 0.3 percent to the lowest level since June 2003.

The Commerce Department reported on Tuesday that new home sales dropped by 1.6 percent. Mortgage applications have declined this year, although many homeowners continue to refinance home loans.

Average mortgage rates are now also lower than a year ago, when 30-year home loans averaged 6.78 percent and 15-year mortgages 6.43 percent.

Last year at this time, the borrowing cost of an ARM was 5.82 percent.

The “5/1″ ARM, at a fixed rate for five years and adjustable each year thereafter, averaged 6.30 percent this week, compared to 6.31 percent last week and 6.39 percent a year ago this week.

Overall, a mortgage company charged an average of 0.4 percent in fees and points on 30- and 15-year loans, both down from 0.5 percent last week.

Fees on the one-year ARM averaged 0.5 percent, down from 0.7 percent last week, and 0.5 percent percent on the 5/1 ARM, down from 0.7 percent.

Freddie Mac is a mortgage finance company chartered by Congress that buys home loans from a mortgage lender and packages them up as securities to sell to investors on the secondary market, or hold in its own portfolio.

SOURCE: Reuters