Mortgage rates fall farther to 6.2 percent
The retreat in mortgages rates comes as the economy is getting weaker.
"Mortgage rates fell (last) week amid new indications of a pullback in consumer spending and a weaker jobs market," said Frank Nothaft, Freddie Mac's chief economist. Those factors are reducing investors' concerns about inflation, which is helping to pull down mortgage rates.
Thirty-year mortgage rates hit a high for the year of 6.63 percent in late July, and then dropped to a seven-month low of 5.78 percent for the week ended Sept. 18.
Rates on other types of mortgages also fell last week.
For 15-year fixed-rate mortgages, rates dropped to 5.88 percent last week from 6.19 percent the previous week. Rates on five-year adjustable-rate mortgages fell to 6.19 percent from 6.36 percent, and rates on one-year adjustable-rate mortgages decreased to 5.25 percent from 5.38 percent.
The drop in rates is good news for people thinking about buying a home. However, tight credit conditions are still making it difficult for some people to obtain financing.
The housing slump is a big factor weighing on the national economy. Sinking home values have made consumers feel less wealthy and less inclined to spend, forced some into foreclosure and led to big losses at financial companies.
The mortgage rates do not include points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 of a point last week. The fee on five-year adjustable-rate mortgages averaged 0.6 of a point, and the fee on one-year adjustable-rate mortgages averaged 0.4 of a point.
A year ago, the nationwide average rate on 30-year mortgages stood at 6.24 percent, 15-year mortgage rates averaged 5.90 percent, five-year adjustable-rate mortgages were at 5.89 percent, and one-year adjustable-rate mortgages clocked in at 5.50 percent.