Mortgage rates dropped this week after the release of a disappointing home construction report, Freddie Mac reported today.

Housing starts in January “showed the weakest reading since August 1997, due to the abundance of homes already on the market to purchase,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. This report, Nothaft said, has “market participants concerned over how much drag the slowing housing market may have on economic growth.”

The 30-year fixed-rate mortgage slid to an average 6.22 percent from 6.3 percent last week, according to Freddie Mac’s weekly survey, while the 15-year fixed-rate mortgage fell from 6.03 percent to 5.97 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.5 on these loans.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) dipped to an average 5.96 percent this week, with an average 0.5 point, while the 1-year Treasury-indexed ARM dropped to 5.49 percent, with an average 0.7 point.

Nothaft said next week’s releases of new- and existing-home sales and fourth-quarter economic growth “should further provide insight into what extent the housing market is affecting the economy.”

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 – 6.25 percent with 0.07 point

Los Angeles – 6.37 percent with 0.46 point

Chicago – 6.41 percent with 0.03 point

San Francisco – 6.2 percent with 0.66 point

Philadelphia – 6.29 percent with 0.21 point

Detroit – 6.34 percent with no points

Boston – 6.39 percent with 0.05 point

Houston – 6.3 percent with 0.53 point

Dallas – 6.18 percent with 0.55 point

Washington, D.C. – 6.21 percent with 0.46 point

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