Freddie Mac: 30-Year Mortgage Rates Drop Under 6 Percent

Interest rates on U.S. 30-year mortgages fell under 6 percent this week, while rates on 15-year and adjustable mortgages also eased, mortgage finance company Freddie Mac (search) said Thursday.

U.S. 30-year mortgage rates averaged 5.99 percent in the week ended Aug. 5 compared with 6.08 percent a week earlier, Freddie Mac said.

Freddie Mac (FRE) said 15-year mortgages averaged 5.40 percent, down from 5.49 percent last week. One-year adjustable rate mortgages dipped to an average of 4.08 percent from 4.17 percent last week.

"Additional economic indicators this week confirmed that June was a weak month for the nation as a whole. Consequently, the upward pressure on interest rates eased, allowing mortgage rates to return to earlier, lower levels," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

"Inventories of available homes for sale are very tight right now. Fortunately, mortgage rates have been most accommodating for homebuyers lately, which allows families looking for a new home the additional time needed to find their home of choice," Nothaft said.

The Commerce Department (search) on Tuesday said U.S. personal income rose 0.2 percent in June after a 0.6 percent gain in May. Personal spending fell 0.7 percent — dragged down substantially by weak demand for durable goods — after rising 1.0 percent in May.

On Monday the National Association of Realtors (search) said its housing affordability index fell to 133.6 in the second quarter of 2004 from 144.1 in the prior quarter and was also lower than 143.8 in the second quarter of 2003. The index measures the ability of a family earning the median income to buy a home at the median price.

Freddie Mac said lenders charged an average of 0.7 percent in fees and points on 30-year mortgages, up from 0.6 percent last week. They charged 0.6 percent on 15-year mortgages and the ARM, both unchanged from last week.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities for investors or holds them in its own portfolio.