By Amy Hoak, MarketWatch
RISMEDIA, July 2, 2007?(MarketWatch)?Mortgage rates dropped again, continuing their turnaround from the upward climb that began in the first half of May, according to Freddie Mac’s weekly survey released on Wednesday.
“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 Federal Open Market Committee’s [Thursday] announcement on monetary policy,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release.
The 30-year fixed-rate mortgage landed at an average 6.67% for the week ending Thursday, down from last week’s 6.69% average. The mortgage is still lower than last year at this time, when it averaged 6.78%.
The 15-year fixed-rate mortgage averaged 6.34% for the week, down from last week’s 6.37% average. The mortgage averaged 6.43% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.30% for the week, down slightly from last week’s 6.31% average. The hybrid averaged 6.39% a year ago.
And 1-year Treasury-indexed ARMs averaged 5.65% for the week, down slightly from last week’s 5.66% average. The ARM averaged 5.82% at this time last year.
To obtain the rates, the two fixed-rate loans required payment of an average 0.4 point, while the ARMs required an average 0.5 point. A point is 1% of the total mortgage amount, charged as prepaid interest.
The drop in rates came during a week that brought further evidence of the current housing recession, Nothaft said.
“May’s existing home sales (including condominiums and co-ops) fell 0.3% to the slowest pace since June 2003, and the number of months houses were available for sale rose to 8.9, the longest since June 1992,” he said.
“In addition, home prices fell 2.1% in 20 metropolitan areas for the year ending April 2007, according to the S&P/Case Shiller composite index, the largest year-over-year drop since the data began in January 2001.”
A separate survey released Wednesday by the Mortgage Bankers Association reported that the volume of loan applications was down for the second week in a row last week.
In that survey, the rate on the 30-year fixed-rate mortgage remained flat at 6.60%, while the 15-year fixed-rate mortgage and the 1-year ARM declined. The MBA survey covers about half of U.S. retail residential mortgage originations.
Amy Hoak is a MarketWatch reporter based in Chicago.
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