Mortgage Rates Hit New Lows
Associated Press - 2/20/2003
WASHINGTON - Mortgage rates around the country fell this
week, setting new lows that economists predicted would spell
more good news for the housing industry. The average
interest rate on a 30-year, fixed-rate mortgage dipped to
5.84 percent for this week, down from 5.86 percent last
week, Freddie Mac reported Thursday in its latest nationwide
survey of rates. That rate was the lowest since the mortgage
giant began tracking 30-year mortgage rates in 1971. Records
that reach back earlier than Freddie Mac's indicate that
rate is the lowest since the early 1960s. Rates for 15-year
fixed-rate mortgages, a popular option for refinancing,
edged down to 5.21 percent, compared with 5.26 percent last
week. The new rate is the lowest since Freddie Mac began
tracking 15-year mortgages in 1991. Rates for one-year
adjustable rate mortgages hit a new record low as well,
dropping to 3.81 percent after three straight weeks at the
previous record low, 3.89 percent. Freddie Mac began
tracking ARM rates in 1984. The low mortgage rates sent
sales of both new and existing homes to record levels last
year and the government reported this week that construction
of new homes and apartments posted a 16-year high in
January, which analysts saw as a good sign the housing
industry was off to another good year. "Current
record-breaking low mortgage rates are keeping demand for
housing strong, even as the overall economy stumbles
sluggishly into the first part of the year," said Frank
Nothaft, chief economist at Freddie Mac. He said the fact
that mortgage applications are holding at high levels was a
good indication that "housing will continue to prop up the
economy for a while longer." Low mortgage rates have made
for brisk home-mortgage refinancing activity. As consumers
swap higher-interest rate home loans for lower-interest rate
ones, the extra cash has helped to support consumer
spending, one of few sources of strength for the struggling
economy. This week's mortgage rates do not include add-on
fees known as points. Thirty-year and 15-year mortgages each
carried an average fee of 0.6 point this week, while
one-year ARMs had an average 0.7 point financing fee. A year
ago, rates on 30-year mortgages averaged 6.81 percent,
15-year mortgages were 6.28 percent and one-year adjustable
mortgages stood at 4.96 percent. -- On the Net:
Freddie Mac:
http://www.freddiemac.com
