September employment report signals soft economy, pressures mortgages rates; 30-year falls to 5.74%.
October 14, 2004: 11:42 AM EDT
NEW YORK (CNN/Money) - Mortgage rates edged lower as a weak employment report pointed to a softer economy, Freddie Mac reported Thursday.
The rate on 30-year fixed-rate mortgages averaged 5.74 percent in the week ended Thursday, with an average 0.6 of a point payable up front, down from last week when it averaged 5.82 percent.
A year earlier, the rate on the 30-year fixed-rate loan stood at 5.95 percent.
The 15-year mortgage rate eased to 5.14 percent this week from 5.24 percent last week, also with 0.6 of a point up front. Last year, the average rate stood at 5.26 percent.
"The decline in mortgage rates was primarily due to a weak employment report for September, which suggested economic growth is still a bit subdued. As a result, we expect mortgage rates will continue to stay quite affordable over the next few months, benefiting future homebuyers," said Freddie Mac's Chief Economist Frank Nothaft.
"Of late, there has been no compelling economic reason to believe mortgage rates would climb out of their recent range."
One-year adjustable rate mortgages (ARMs) averaged 4.01 percent, down from 4.08 percent the week prior, with 0.6 of a point payable up front. At this time last year, the average rate for ARMs was 3.69 percent.
"Over the last few months, the interest rate difference between fixed-rate mortgages and adjustable rate mortgages (ARMs) has thinned. If this continues, ARMs may lose some appeal amongst homeowners in the coming months," added Nothaft.
Source: http://money.cnn.com/2004/11/04/real_estate/weekly_rates/index.htm
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