Federal Reserve’s latest cut spurs forth consecutive decline

Washington – Rates on 30-year mortgages dropped to the lowest level in nearly four years this week, raising hopes that low rates will help spur a rebound in the hard-hit housing industry.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 5.48 percent this week, down from 5.69 percent last week.

It was the fourth consecutive decline and the third straight week that rates have been below 6 percent. The new rate marked the lowest point for 30-year mortgages since they averaged 5.40 percent the week of March 25, 2004.

Economists attributed the decline to further weak news on the economy combined with the biggest reduction of a key interest rate by the Federal Reserve in more than 20 years, a move that has raised hopes the Fed will be making more rate cuts as it steps up its efforts to combat a threatened economic recession.

Rates on 15-year mortgages dropped to 4.95 percent this week, down from 5.21 percent last week.

Rates on five-year, adjustable-rate mortgages declined to 5.13 percent, compared with 5.40 percent last week; rates on one-year ARMs fell to 4.99 percent, down from 5.26 percent last week.

 

Back to News