30-year fixed-rate still below 5%

For borrowers with good credit and cash for a downpayment, mortgage rates remained at or near record lows this week, according to Freddie Mac's latest weekly rate survey.

The survey found rates on 30-year fixed-rate mortgages averaged 4.75 percent for the week ending June 17, with an average of 0.7 point. That's up slightly from last week, when 30-year fixed-rate loans averaged 4.72 percent, but down from 5.38 percent a year ago.

The all-time record low for 30-year fixed-rate loans in records dating back to 1971 was set during the week of Dec. 3, when the rates averaged 4.71 percent.

Rates on 15-year fixed-rate mortgages averaged 4.2 percent with an average 0.7 point, up from 4.17 percent last week but down from 4.89 percent a year ago.

For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 3.89 percent this week, with an average 0.7 point. That's down from 3.92 percent last week and 4.97 percent a year ago, and was the lowest rate for 5-year ARMs since Freddie Mac started tracking them in January 2005.

Rates on 1-year Treasury-indexed ARMs averaged 3.82 percent with an average 0.6 point, down from 3.91 percent last week and 4.95 percent a year ago. It was the lowest rate for 1-year ARMs since the week ending May 6, 2004, when those loans averaged 3.76 percent.

Rates surveyed by Freddie Mac are for prime borrowers taking out loans with 20 percent downpayments. Borrowers taking out loans too large or risky for purchase or guarantee by Freddie Mac can expect to pay more.

Recent turmoil in financial markets has made the mortgage-backed securities that are the ultimate source of funding for most home loans popular with investors, helping keep rates charged to borrowers low.

But the Mortgage Bankers Association is forecasting that rates on 30-year fixed-rate mortgages will gradually rise to 5.4 percent during the fourth quarter of this year, reach 6 percent in the last three months of 2011, and average 6.6 percent in the fourth quarter of 2012.

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