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Long-Term Mortgage Rates Drop

30-year fixed loan hits 5.94 percent

October 10, 2008

According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 5.94 percent--with an average 0.6 point--compared with last week's average of 6.10 percent. Last year at this time, the 30-year loan averaged 6.40 percent.

The average for the 15-year fixed-rate mortgage this week dropped to 5.63 percent, with an average 0.6 point, from last week when it averaged 5.78 percent. It averaged 6.06 percent a year ago at this time.

Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, averaged 5.90 percent this week, with an average 0.6 point, down 10 basis points from last week. The rate year ago was 6.12 percent.

Only the one-year Treasury-indexed ARMs showed an increase, with the average rising to 5.15 percent this week with an average 0.6 point, from last week's 5.12 percent. At this time last year, the 1-year ARM averaged 5.73 percent.

"Longer-term mortgage rates fell for the first time in three weeks, roughly following bond market yields," said Frank Nothaft, Freddie Mac vice president and chief economist. "Meanwhile, the latest housing market data showed some pickup in home purchase activity in August. Pending existing home sales in August rose 7.4 percent, according to the National Association of Realtors."

More recently mortgage applications for both home purchases and refinancing grew slightly over the week ending October 3rd, reversing a two-week decline, based on figures from the Mortgage Bankers Association.

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