Fixed mortgages drop to lowest rate in almost 40 years


January 05, 2003|By Bloomberg News

The average rate on a 30-year fixed mortgage fell last week to the lowest level in almost four decades, according to Freddie Mac, the No. 2 buyer of U.S. mortgages.

The 30-year rate declined to 5.85 percent in the week that ended Friday, the lowest since the early 1960s, from 5.93 percent. The average rate on one-year adjustable mortgages rose to 4.06 percent, up from a rate of 4.01 percent that was the lowest in almost two decades of recordkeeping.

"Just when we were sure mortgage rates couldn't possibly drop any lower, we were surprised yet again," said Frank Nothaft, chief economist at Freddie Mac. "We continue to expect, however, that rates will hover around 6 percent for at least another few months."

The latest 30-year fixed mortgage rate from Freddie Mac puts the average monthly payment on a $100,000 loan, including principal and interest with 1 point, at $589.94, down from $674.73 at the corresponding time last year, when the rate was 7.14 percent.

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