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Fixed Mortgage Rates Sink to Lowest Level of 2014

mortgage-app-five [1]Average fixed mortgage rates drifted down again this week, sinking to their lowest level so far this year.

Freddie Mac [2] reported [3] Thursday that the average fixed interest rate for a 30-year fixed-rate mortgage (FRM) was 4.10 percent (0.5 point) for the week ending August 21, down 2 basis points from last week's average.

The previous 2014 low was 4.12 percent, first seen in late May and then again three more times throughout the summer.

A year ago, the 30-year FRM averaged 4.58 percent—its peak in 2013.

The average interest rate for a 15-year FRM this week was 3.23 percent (0.6 point), down from 3.24 percent a week ago.

Adjustable rates were mixed for the week. According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.95 percent (0.5 point) in the latest survey, down slightly from last week, while the 1-year ARM edged up to 2.38 percent (0.5 point).

Reporting in its own survey [4]Bankrate.com [5] recorded the 30-year fixed average at 4.24 percent for the week, while the 15-year fixed average was 3.37 percent. Both were down over the week.

The site also saw a decline in the 5/1 ARM, which was down to 3.28 percent.

Bankrate says troubles abroad played a role in this week's rate movements, as has been the case for much of the summer.

"Muted inflation readings and ongoing tensions in hotspots around the globe helped fuel demand for bonds, pushing mortgage rates lower. Any time there is reason for nervousness among investors, their movement into the perceived safe haven of bonds is good news for mortgage rates," analysts for the site said.

They added: "Low inflation has also been a boon for bond demand as inflation erodes the fixed payments bond holders receive."