Mortgage rates dropped this week on news that economic growth came in under expectations, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage fell to an average 6.31 percent, down from 6.4 percent last week, while the 15-year fixed-rate mortgage sank to an average 6.02 percent from last week’ 6.1 percent.

Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.05 percent this week, with an average 0.5 point, down from last week’s 6.14 percent. The one-year Treasury-indexed ARM averaged 5.53 percent, with an average 0.6 point, down from last week when it averaged 5.6 percent.

“Lower-than-expected third-quarter Gross Domestic Product (GDP) figures helped to put a damper on rising rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “With mortgage rates down this week, we may see a spurt of refinancing by those who want to get out of ARMs that are scheduled to reset in the next year while interest rates are still comparatively low.

“We are also seeing a higher number of homeowners who are taking cash out of their homes for home improvement or other needs rather than opting for a prime rate home equity loan now that the prime rate is over 8 percent.”

In Bankrate.com’s survey, concerns about slower economic growth and a surprising dip in consumer confidence helped push mortgage rates lower this week. Mortgage rates dropped back to levels last seen one month ago, with the average 30-year fixed rate retreating to 6.31 percent and averaging 0.25 discount and origination points.

The average 15-year fixed-rate mortgage, popular for refinancing, fell to 6.02 percent, from 6.16 percent last week, Bankrate.com said. On larger loans, the average jumbo 30-year fixed rate slid to 6.59 percent. Adjustable-rate mortgages also declined, with the average 5/1 ARM dipping to 6.13 percent and the average one-year ARM descending to 5.92 percent.

The economic slowdown was evident in the initial estimate of third-quarter economic growth, with the Gross Domestic Product growing by an annualized pace of 1.6 percent, according to Bankrate.com. A popular gauge of the manufacturing sector, the Institute for Supply Management Index, fell to a three-year low. Even consumer confidence dipped despite a rising stock market and lower gasoline prices. A slower-moving economy increases investor demand for bonds, with prices rising and yields falling. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are sharply lower than four months ago, when rates were flirting with 7 percent. At that time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.31 percent, the same loan originated today would carry a monthly payment of $1,022. Fixed mortgage rates are a compelling refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments, Bankrate.com reported.

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

New York – 6.23 percent with 0.1 point

Los Angeles – 6.42 percent with 0.38 point

Chicago – 6.45 percent with 0.01 point

San Francisco – 6.29 percent with 0.38 point

Philadelphia – 6.27 percent with 0.25 point

Detroit – 6.38 percent with no points

Boston – 6.29 percent with 0.09 point

Houston – 6.3 percent with 0.42 point

Dallas – 6.31 percent with 0.37 point

Washington, D.C. – 6.21 percent with 0.49 point

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