U.S. 30-year mortgage rates continue to fall [2008-11-13]

WASHINGTON - Rates on 30-year mortgages fell again this week, to 6.67 percent from 6.69 percent last week, according to a weekly survey released by finance company Freddie Mac on Thursday.

Average rates on 15-year mortgages also dropped, to 6.34 percent from 6.37 percent, while rates on one-year adjustable rate mortgages averaged 5.65, down from 5.66 percent last week.

Reports that existing home sales dropped in May as part of what Freddie Mac calls "the current housing recession" helped mortgage rates ease. The mortgage giant also said the market is waiting to see if the Federal Reserve changes its monetary policy at the conclusion of its meeting on Thursday.

"Mortgage rates edged down slightly for the second week in a row after having risen over the previous month and a half, and as financial markets prepared for the June 28 Federal Open Market Committee's announcement on monetary policy," said Frank Nothaft, Freddie Mac vice president and chief economist.

On Monday, the National Association of Realtors reported that existing home sales in May fell 0.3 percent to the lowest level since June 2003. The Commerce Department reported on Tuesday that new home sales in the same month dropped 1.6 percent.

Average mortgage rates were also lower than a year ago, when 30-year loans averaged 6.78 percent and 15-year mortgages were at 6.43 percent. Last year at this time the cost to borrow via an ARM was 5.82 percent.

The "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 6.30 percent this week, compared with 6.31 percent last week and 6.39 percent last year.

Freddie Mac said lenders charged an average of 0.4 percent in fees and points on 30- and 15-year mortgages, both down from 0.5 percent last week. Fees on the one-year ARM averaged 0.5 percent, down from 0.7 percent last week, and 0.5 percent percent on the 5/1 ARM, down from 0.7 percent.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.