Originally created 06/20/03

Mortgage rates remain at record low levels



WASHINGTON --Rates on 30-year mortgages remained at record low levels this week, welcome news to the housing market, one of the economy's few sources of power.

The average rate on a 30-year fixed-rate mortgages for the week ending June 20 was 5.21 percent, unchanged from last week, Freddie Mac, the mortgage giant, reported Thursday in its weekly nationwide survey.

Last week's rate was the lowest since Freddie Mac began tracking 30-year mortgages in 1971. Records that reach back earlier indicate that the rate is the lowest in more than four decades, economists said.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates edged up to 4.62 percent this week, after dropping to a record low of 4.60 percent last week. Last week's rate was the lowest level since Freddie Mac began tracking 15-year mortgages in 1991.

Rates for one-year adjustable mortgages declined to a new low of 3.51 percent this week, down from the previous low of 3.54 percent last week. Freddie Mac's records on one-year ARMs go back to 1984.

Low mortgage rates are keeping the housing market healthy. And, they are feeding a home-mortgage refinancing boom, something that is helping to support spending by consumers, a key force keeping the economy going.

Refinancing activity accounted for 77.3 percent of all mortgage loan applications filed last week, up from 76.9 percent the week before, the Mortgage Bankers Association of America reported. The association also is forecasting a record, $3.3 trillion in home mortgage activity this year, with 68 percent of that expected to come from refinancing.

This week's mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.

A year ago, rates on 30-year mortgages averaged 6.63 percent, 15-year mortgages were 6.08 percent and one-year adjustable mortgages stood at 4.60 percent.

Home builders, meanwhile, are more bullish about sales prospects, the National Association of Home Builders says.

"There is no question that today's interest-rate picture is the best it has been in many decades and home values have continued to move up a solid pace," said the association's chief economist, David Seiders. "These factors have stimulated both home buying and refinancing by America's home owners, providing double-barreled support to the nation's economy."

On the Net:

Freddie Mac: http://www.freddiemac.com