Saturday, October 07, 2006

Home Mortgage Rate Hits 7-Month Low

October 6, 2006; Page C4

NEW YORK -- Long-term home mortgage rates were stable to slightly lower in the past week, with the average 30-year fixed rate reaching a seven-month low, said housing-finance agency Freddie Mac.

The average for 30-year fixed mortgage rates in the week ended yesterday fell to 6.30% from 6.31% a week earlier. One year ago, the rate averaged 5.98%. It is the lowest the 30-year fixed rate has been since the week of March 2, 2006, when it averaged 6.24%.

The average for 15-year fixed-rate mortgages this week was 5.98%, unchanged from a week ago and up from the year-earlier 5.54%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages were 6%, unchanged from the previous week and up from the year-ago 5.48%.

One-year Treasury-indexed ARMs fell to 5.46% from last week's average of 5.47%. The rate averaged 4.77% a year ago.

With mortgage rates having dropped sharply, "not surprisingly, home refinancing rose 18% last week, accounting for almost half of all mortgage applications," said Frank Nothaft, Freddie Mac vice president and chief economist. "This is due both to the recent decline in mortgage rates and to homeowners who are refinancing ARMs rather than waiting for them to reset in the future when rates may be higher."

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