Mortgage Rates Drop to 6 -Week Low

Thirty year fixed-rate mortgages declined this week to an average of 6.22 percent, down from 6.30 percent last week and 6.26 percent a year earlier, Freddie Mac reports. "Mortgage rates eased a little more this week, as market participants were concerned over how much drag the slowing housing market may have on economic growth," says Frank Nothaft, Freddie Mac vice president and chief economist.

"Last week's release of housing starts for January showed the weakest reading since August 1997 due to the abundance of homes on the market.”Freddie Mac’s Primary Mortgage Market Survey for the week ending Feb. 22 shows that 15-year fixed-rate mortgages averaged 5.97 percent, down 6.03 percent last week and 5.89 percent a year ago.

5-Year ARMs, 1-Year ARMs Also Drop

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.96 percent this week, a decline over last week when it averaged 6.01 percent. A year ago, the 5-year ARM averaged 5.96 percent.

One-year Treasury-indexed ARMs, meanwhile, averaged 5.49 percent this week with an average 0.7 point. That’s a decline from last week’s 5.52 percent. At this time last year, the 1-year ARM averaged 5.32 percent.

"Next week's releases of new and existing home sales should offer a more complete gauge of the strength of the housing industry,” Nothaft says. “In addition, the second estimate of economic growth in the fourth quarter of 2006 will be released next week and should further provide insight into what extent the housing market is affecting the economy."

Source: Freddie Mac REALTOR Magazine Online