Mortgage rates dropped for the second consecutive week to lows not seen since late March, according to surveys conducted by mortgage buyer Freddie Mac and Bankrate.

In Freddie Mac’s weekly survey, the 30-year fixed-rate mortgage averaged 5.7 percent for the week ended today, down from last week when it averaged 5.75 percent. The average for the 15-year fixed-rate mortgage this week is 5.1 percent, also down from last week when it averaged 5.13 percent. Points on both the 30- and 15-year averaged 0.7.

One-year Treasury-indexed adjustable-rate mortgages averaged 4 percent this week, with an average 0.7 point, down from last week when it averaged 4.03 percent.

“This new millennium has proven to be very homeowner-friendly. For instance, in the last four years we have set records in housing starts, housing sales, low mortgage rates, refinancing volumes and total mortgage originations,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a matter of fact, low mortgage rates in August led to housing starts in that month that were the second highest in over two decades.

“Our Primary Mortgage Market Survey results this week show mortgage rates slipping again, which will all but guarantee that the housing industry will continue at its robust pace and set yet again, another record for both new construction and overall home sales.”

Fixed mortgage rates declined again and remain at the lowest level since March 31, according to Bankrate.com’s weekly national survey of large lenders. The average 30-year fixed-rate mortgage fell from 5.76 percent to 5.71 percent, even as the Federal Open Market Committee raised short-term interest rates. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.36 discount and origination points.

The 15-year fixed-rate mortgage popular for refinancing fell to 5.09 percent from 5.16 percent. The average rate for the jumbo 30-year fixed-rate mortgage dropped from 5.98 percent to 5.95 percent, with the average one-year adjustable-rate mortgage holding steady at 4.21 percent.

Mortgage rates declined this week despite the third hike in short-term interest rates since June 30 by the Federal Reserve’s rate-setting committee. Unlike many consumer loans that follow the rates controlled by the Fed, mortgage rates move with yields on long-term Treasury securities. Both Treasury yields and mortgage rates have declined substantially since June as the economic expansion has slowed and inflation has remained tame. Despite the economic optimism of the Fed, bond investors have a much more pessimistic outlook on the economy and this pessimism is keeping bond yields and mortgage rates low even as short-term interest rates rise.

The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.

New York – 5.73 percent with 0.1 point

Los Angeles – 5.72 percent with 0.59 point

Chicago – 5.78 percent with 0.01 point

San Francisco – 5.75 percent with 0.4 point

Philadelphia – 5.71 percent with 0.31 point

Detroit – 5.63 percent with 0.38 point

Boston – 5.83 percent with no points

Houston – 5.66 percent with 0.68 point

Dallas – 5.68 percent with 0.56 point

Washington, D.C. – 5.61 percent with 0.61 point

***

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