Rates on 30-year mortgages fall

Rates on 30-year mortgages fall

	Published : Thu, 08 Feb 2007 20:30 By : Agencies Print this Story

WASHINGTON (AFX) - Rates on 30-year mortgages fell for the first time since early December as lower-than-expected job growth eased worries in financial markets about inflation.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.28 percent this week, down from 6.34 percent last week. Last week's level had been the highest for mortgages since October.

The small decline was the first drop in rates since Dec. 7 when 30-year mortgages had fallen to 6.11 percent, the lowest level since early 2006.

The decline this week came after a government report showed that the unemployment rated edged up to 4.6 percent in January when a fewer-than-expected 111,000 jobs were created.

'News of moderate employment gains in January led to a halt in the recent upward trend of interest rate movements,' said Frank Nothaft, chief economist at Freddie Mac.

Analysts said the jobs report, coming after a string of stronger-than-expected economic data, eased concerns that the economy was now growing so strongly that it might prompt the Federal Reserve to start raising interest rates again.

Nothaft predicted that 30-year mortgages would likely remain in a narrow band between 6.3 percent and 6.5 percent for the rest of this year.

The Freddie Mac survey showed that other types of mortgage rates also moved lower this week.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 6.02 percent, down from 6.06 percent last week.

Five-year adjustable rate mortgages fell to 6.02 percent, down from 6.04 percent last week. One-year ARMs dipped to 5.49 percent, down from 5.54 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.3 point. Five-year mortgages carried an average fee of 0.4 point while one-year mortgages carried a fee of 0.7 point.

A year ago, rates on 30-year mortgages stood at 6.24 percent while 15-year mortgages were at 5.83 percent, five-year adjustable rate mortgages averaged 5.89 percent and one-year ARMs were at 5.34 percent.