Industry News

Fed move pulls mortgage rates down

Significant slowing in home construction also impacts market

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Long-term mortgage rates declined this week, helped in part by the Federal Reserve's recent cut of the rate it charges banks for direct loans, Freddie Mac and reported today. In Freddie Mac's survey, the 30-year fixed-rate mortgage slid to an average 6.52 percent from last week's 6.62 percent, and the 15-year fixed-rate mortgage dropped to 6.18 percent from 6.3 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 and 0.5, respectively, on the 30- and 15-year loans. "Interest rates on conforming long-term fixed-rate mortgages and one-year adjustable-rate mortgages trended down by about one-tenth of a percent in the past week," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. "This is a result of yields on Treasury securities coming down, and the Fed's decision to cut the discount rate by half a percent to 5.75 percent last Friday." Adjustable-rate mortgages (ARMs) we...