Rates on fixed-rate mortgages improve

Rates on fixed-rate mortgages fell for the week ending Aug. 21, while rates on adjustable-rate mortgages were stable or up slightly, Freddie Mac said today in its weekly Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 6.47 percent with an average 0.7 point, down from 6.52 percent last week and 6.52 percent a year ago. The 15-year fixed-rate mortgage averaged 6 percent with an average 0.7 point, down from 6.07 percent a week ago, and 6.18 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.99 percent with an average 0.6 point, down from 6.02 percent last week and 6.34 percent a year ago. One-year Treasury-indexed ARMs averaged 5.29 percent with an average 0.5 point, up from 5.18 percent last week and 5.6 percent a year ago.

Although mortgage rates are affordable by historical standards, there is continued evidence of weakness in housing, Freddie Mac Chief Economist Frank Nothaft said in a statement accompanying the release of the survey. Housing starts fell to 0.965 million units (annualized) in July, the slowest pace since March 1991, and home builder confidence remained at an all-time record low in August since polling began in January 1985.

"Next week, market watchers will be looking to the release of house-price indices from S&P/Case-Shiller, OFHEO and Freddie Mac for signs of whether home prices may be slowing their descent as recent monthly indices have shown, or whether the observed deceleration was temporary," Nothaft said.

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