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Long-Term Rates Continue to Drop

Mortgage interest rates slipped lower again this week, according to the ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/release.html (PMMS) released Thursday by ""Freddie Mac"":http://www.freddiemac.com. Frank Nothaft, the GSE's VP and chief economist, said that along with the recent moderation in home price declines, lower rates are providing a big boost to the nation's ailing housing market.
Nothaft cited figures from the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA), which show that conventional mortgage applications for home purchases jumped 7.2 percent by the end of June, after the rate for 30-year mortgages dropped a quarter of a percentage point in the latter half of last month.
Freddie Mac reported the average rate for a 30-year fixed-rate mortgage (FRM) is now 5.32 percent (0.7 point). Last week it was 5.42 percent, and last year at this time, the 30-year FRM averaged 6.35 percent.
For the week ending July 2, 2009, the GSE's study shows 15-year FRMs averaged 4.77 percent (0.7 point). The rate for a 15-year FRM last week averaged 4.87 percent. A year ago at this time, it was 5.92 percent.
Five-year adjustable-rate mortgages (ARMs) are currently averaging 4.88 percent (0.7 point), down from last week's average of 4.99 percent. During the same period last year, the 5-year ARM averaged 5.78 percent.
One-year ARMs averaged 4.94 percent this week (0.6 point) - the only loan product in Freddie's study to rise. Last week, the average rate for a 1-year ARM was 4.93 percent, and last year, it was 5.17 percent.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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