Mortgage rates have eased over the past week as President Bush signed into law an emergency plan to rescue Fannie Mae and Freddie Mac, which hold nearly half the country's housing debt.
Freddie Mac said in its weekly mortgage-rate report Thursday that short-term, long-term, fixed and adjustable rates all swooned. The lender attributed the drop to lower commodity prices as well, which eases concerns about inflation, despite mixed reports on the housing market.
Freddie's 30-year fixed mortgages averaged 6.52% with an upfront payment of seven-tenths of a point, down from 6.63% a week earlier. Shorter term 15-year fixed mortgages averaged 6.07% with a payment of six-tenths of a point, down from 6.18%.
Five-year adjustable-rate mortgages that are indexed to Treasury notes averaged 6.07% with a payment of six-tenths of appoint, down from 6.16%. One-year ARMs posted an average rate of 5.27% with the same payment, down from 5.49%.
All four rates are also below year-ago levels.
"A drop in commodity prices eased market concerns over inflation pressures," says Freddie Chief Economics Frank Nothaft, who noted that oil and gasoline prices reached their lowest levels since May.
On the other hand, it was difficult to get a clear reading on what housing reports released during the week meant for the relative strength of the market. The supply of existing homes climbed to 11 months in June, while the supply of new homes dropped to seven months for the second time in a row. The U.S. homeownership rate rose slightly to 68.1% during the second quarter from 68% the previous one, but was still below the 68.3% level a year earlier.
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