Thirty- and 15-year fixed mortgage rates this week fell to their lowest levels since the spring of 2004, Freddie Mac reported today.

The average rate on 30-year fixed mortgages tumbled 21 basis points in the last week, falling from 5.69 percent to 5.48 percent, and the average 15-year fixed mortgage dropped 26 basis points, from 5.21 percent to 4.95 percent. The last time the 30-year fixed was this low was March 25, 2004, at 5.4 percent; the 15-year fixed hasn’t been this low since April 1, 2004, when it averaged 4.84 percent.

Points, or fees that lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

According to Freddie Mac, adjustable-rate mortgages (ARMs) fell sharply this week to lows not seen since 2005. The five-year Treasury-indexed hybrid ARM sank from an average 5.4 percent to 5.13 percent, and the average one-year ARM dropped from 5.26 percent to 4.99 percent. Points on these loans averaged 0.4 and 0.6, respectively.

Frank Nothaft, Freddie Mac’s vice president and chief economist, said that several reports released last week “confirmed the weak condition of the housing market.”

December housing starts fell to 1.006 million units, the “slowest pace since May 1991,” Nothaft said, and the 25 percent drop in 2007 starts from 2006’s level was the “largest annual decline since 1980.” Building permits issued also decline to their lowest level since March 1993, he said.

“When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut: It is the largest cut since October 1984, and also the first time in more than six years that the Fed took such action outside of a scheduled Federal Open Market Committee meeting,” Nothaft said. “The last time the Fed decided to ease the target federal funds rate in an unscheduled meeting was immediately after Sept. 11, 2001. As a result, mortgage rates continued trending down for the fourth consecutive week across loan products.”

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