WASHINGTON – Rates on 30-year mortgages fell to the lowest level since mid-December as investors scrambled to the safety of bonds following last week's stock market turmoil.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.14 percent this week, down from 6.18 percent last week.
The decline pushed 30-year rates down to the lowest point since they averaged 6.13 percent the week of Dec. 21. Other rates dropped as well.
Analysts said the declines reflected the big 416-point plunge in the Dow Jones industrial average last week. The stock market turbulence sent investors fleeing to the safety of bonds, which meant the yields on those bonds -- which determine mortgage rates -- fell.
"Mortgage rates slid further in the past week to the lowest level this year as volatility in overseas stock markets led to questions about implications for the U.S. economy," said Frank Nothaft, chief economist at Freddie Mac.
Nothaft said he believed the economy would strengthen as the year moves forward and this would leave 30-year mortgages moving in a narrow range of between 6.3 percent and 6.4 percent.
The Freddie Mac survey showed that other types of mortgage rates hit their lowest points for the year as well.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 5.86 percent, down from 5.92 percent last week.
Five-year adjustable rate mortgages edged down to 5.90 percent, compared to 5.93 percent last week.
One-year ARMs dipped to 5.47 percent, down from 5.49 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages, 15-year and five-year mortgages all carried a nationwide average fee of 0.5 point while one-year mortgages carried an average fee of 0.6 point.
A year ago, rates on 30-year mortgages stood at 6.37 percent while 15-year mortgages were at 6.00 percent, five-year adjustable rate mortgages averaged 6.03 percent and one-year ARMs were at 5.45 percent.