WASHINGTON, July 5 (UPI) -- Freddie Mac on Friday reported that long-term mortgage rates were little changed amid a lack of activity during the holiday week.
Freddie Mac, which adjusts mortgage rates according to prices that mortgage-backed securities bring in the secondary bond market, said the average rate on the 30-year loan to homebuyers inched up to 6.57 percent from 6.55 percent last week but remained below the 6.63 percent level lenders were asking two weeks earlier.
A year ago, the 30-year average was 7.19 percent and they have been hovering around the 6.5 to 7 percent level since January 2001, trading in a tight range of 6.45 percent and 7.20 percent. Analysts believe that mortgage rates will be fairly stable this year and will continue to support the housing market.
Analysts noted rates had been moving lower as a result of the Federal Reserve's yearlong string of interest rates reductions during last year. Rates on 30-year mortgages hit a low of 6.45 percent in early November of last year, their lowest point since Freddie Mac began conducting its nationwide survey in 1971.
Freddie Mac said the rate on the 15-year loan rose to 6.03 percent from 5.99 percent last week but also remained below the 6.08 percent level lenders had been asking two weeks ago. A year ago, the 15-year loan averaged 6.74 percent.
The group said the rate on the 1-year adjustable mortgage slipped to 4.58 percent from 4.61 percent last week and from the 4.60 percent level lenders were asking two weeks earlier. The 1-year ARM has not been lower since the week ending March 11, 1994, when it averaged 4.51 percent, Freddie Mac noted. This time last year, the 1-year ARM averaged 5.71 percent.
The rates do not include add-on fees known as points, which averaged 0.5 percent on all the loans.
Frank Nothaft, Freddie Mac chief economist, said, "There was little activity during this holiday week to move mortgage rates one way or another. Consequently, rates remained near record lows.
"With mortgage rates staying so attractively low, applications for refinancing ticked up to levels comparable to those in January when refinancing dominated the market, according to figures from the Mortgage Bankers Association of America," Nothaft said.
"So for those who missed their chance to refinance into lower rates in the recent past, they may now have a second chance to reduce their monthly mortgage payment," the economist added.
The Federal Home Loan Mortgage Corporation, which has been tracking rates since 1971, surveys 125 banks, savings and loans and mortgage lenders, to calculate rates.
Freddie Mac is a corporation chartered by Congress that buys mortgages from lenders and packages them into securities for investors.
