Mortgage Rates Fell in Week

Rates on fixed-rate home mortgages fell this week, following reports of weakness in the economy. But rates on adjustable-rate mortgages rose slightly.
The Wall Street Journal Online
The 30-year fixed-rate mortgage averaged 6.40% for the week ended Aug. 28, down from 6.47% last week.

The mortgage averaged 6.67% a year ago. And 15-year fixed-rate mortgages averaged 5.93%, down from last week's 6.00%. The mortgage averaged 6.12% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.03%, up from last week's 5.99%. The ARM averaged 6.35% a year ago.

One-year Treasury-indexed ARMs averaged 5.33%, up from last week's 5.29%. The ARM averaged 5.84% a year ago.

"Interest rates for fixed-rate mortgages continue to drift down as reports of economic weakness persist," Frank Nothaft, Freddie Mac's chief economist, said in a news release.

"ARM rates, on the other hand, rose slightly after the Federal Reserve's Open Market Committee hinted it might increase the overnight bank lending rate in its Aug. 5 minutes," he said.

The housing market, however, has provided some encouraging signs, he added.

For example, on Wednesday, the Mortgage Bankers Association reported that mortgage application volume rose last week, for the first time in three weeks.