Fixed Rate Mortgages More Affordable

Rates for 30-year fixed-rate mortgages averaged 6.4 percent this week with an average 0.6 point, down from 6.47 percent a week ago and 6.67 percent a year ago, Freddie Mac said in its weekly Primary Mortgage Market Survey.

The 15-year fixed-rate mortgage averaged 5.93 percent with an average 0.6 point, down from 6 percent a week ago and 6.12 percent this time last year.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.03 percent with an average 0.6 point, up from 5.99 percent a week ago but down from 6.35 percent last year.

One-year Treasury-indexed ARMs averaged 5.33 percent with an average 0.7 point, up from 5.29 percent last week but down from 5.84 percent a year ago.

ARM rates rose slightly after minutes of the Aug. 5 meeting of the Federal Reserve’s Open Market Committee were released, revealing that the committee might increase the overnight bank lending rate, said Frank Nothaft, Freddie Mac vice president and chief economist.

In his August Economic and Housing Market Outlook, Nothaft projected rates for 30-year fixed-rate mortgages will hit 7 percent by the end of next year, and that one-year Treasury-indexed ARMs will average 5.9 percent in 2009.