Cool Market Keeps Mortgage Rates Affordable

The national average interest rate on a 30-year, fixed-rate mortgage was 6.4 percent this week, down from last week's 6.43 percent.
REALTOR® Magazine Online
The national average interest rate on a 30-year, fixed-rate mortgage was 6.4 percent for this week, down from the previous week’s 6.43 percent, according to Freddie Mac. Last year, the average rate for 30-year, fixed mortgages was 5.8 percent.

“A slowing housing market and signs that inflation is leveling off have helped to lower mortgage rates lately and keep them more affordable,” says Frank Nothaft, Freddie Mac vice president and chief economist. “For example, housing starts dropped to a three-year low in August and the Producer Price Index (PPI) fell below market expectations.”

The average rate for 15-year, fixed mortgages was 6.06 percent, compared with 6.11 percent the previous week and 5.37 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.08 percent, down from the previous week’s 6.1 percent. A year ago, the five-year ARM averaged 5.31 percent.

The average rate for one-year ARMs was 5.54 percent, compared with 5.6 percent a week earlier and 4.48 percent a year ago.

“Going forward, the economy is expected to expand at a somewhat slower rate than it did in the first half of the year," Nothaft says. "This should continue to keep inflation in check, and therefore, mortgage rates low.”