Mortgage rates tumble in week

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WASHINGTON, Aug. 4 (UPI) -- Long-term mortgage rates fell sharply in the week ending Thursday, pushed lower by a weak economy, the U.S. Federal Home Loan Mortgage Corp. said.

Average interest rates for 15-year loans fell to a historic low, while 30-year fixed-rate loans fell to a low for 2011, Freddie Mac said.

Interest rates for 15-year contracts dropped to 3.54 percent with 0.7 points, down from 3.66 percent, while interest rates for 30-year mortgages averaged 4.39 percent with 0.8 points, down from last week's 4.55 percent.

Rates for 15-year, fixed-rate mortgages a year ago stood at 3.95 percent. Rates for 30-year mortgages a year ago averaged 4.49 percent.

Frank Nothaft, Freddie Mac's vice president and chief economist, said "signs the economy was weaker than what markets had previously thought" contributed to the decline in interest rates.

"The economy grew 1.3 percent in the second quarter, which was below the market consensus forecast, and first-quarter growth was cut to less than a quarter of what was originally reported," Nothaft said.