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Mortgage rates drop sharply this week

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Long-term mortgage rates tumbled this week after the Fed cut a key short-term interest rate and on news that inflation in February was weaker than expected, Freddie Mac reported today. The average rate on 30-year fixed mortgages dropped to 5.87 percent from last week's 6.13 percent, and the average 15-year fixed rate plunged to 5.27 percent from 5.6 percent. To qualify for these rates, borrowers must pay points, or fees that lenders charge for loan processing expressed as a percent of the loan, which this week averaged 0.5 on the 30- and 15-year loans. "Mortgage rates fell this week as various actions were taken to improve market liquidity," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. "In addition, the inflation report from the Consumer Price Index (CPI) reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI...