WASHINGTON – Interest rates on thirty-year mortgages stayed under 6 percent for a third straight week, mortgage finance company Freddie Mac (FRE) said on Thursday, remaining at their lowest averages since early April.
U.S. 30-year mortgage rates averaged 5.81 percent in the week ended Aug. 19, down from 5.85 percent a week earlier, Freddie Mac said. They were again the lowest since an average of 5.79 percent in the week ended April 8, 2004.
Freddie Mac said 15-year mortgages stood at an average of 5.19 percent, down from 5.24 percent last week and the lowest since they averaged 5.12 percent, also in the April 8, 2004, week.
One-year adjustable rate mortgages dipped in the week to an average of 4.01 percent from 4.08 percent, the lowest since 3.98 percent in the June 3, 2004, week.
"Mortgage rates eased even further this week in response to a setback in economic growth during June and possibly July," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
But he added, "We believe the slowdown to be temporary and we expect growth to pick back up in the second half of this year."
He pointed to a recent Commerce Department (search) report of an 8.3 percent surge in U.S. July housing starts as evidence that "lower rates have spurred further expansion of homeownership.
"Thanks in great part to the low mortgage rates we have experienced thus far, 2004 will be another banner year for the housing industry," Nothaft added.
Next week the National Association of Realtors (search) will release U.S. July existing home sales and the Commerce Department will issue new U.S. home sales for that month. Commerce will also release another estimate of second-quarter 2004 U.S. gross domestic product.
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.