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Mortgage Rates Remain Steady Though 5-year Rate Sets New Record Low

For the fourth week in a row, 30-year fixed mortgage rates held steady at just above 4.5 percent, according to Freddie Mac's ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/, released Thursday. Freddie Mac calculates average interest rates based on data from about 125 lenders across the country.
[IMAGE] The 30-year fixed-rate mortgage averaged 4.51 percent (0.7 point) for the week ending June 30. This is up one-hundredth of a percentage point from the previous week and down just slightly from this time last year when the rate averaged 4.58 percent.

""Interest rates on 30-year fixed mortgages hovered around 4.5 percent for the fourth consecutive week following mixed reports on the strength of the economy,"" said Frank Nothaft, vice president and chief economist, Freddie Mac. ""

Nothaft continued, ""First quarter economic growth was revised up in the final estimate, but growth in consumer


spending stagnated in May while April's figure was revised downward; consumer expenditures account for roughly two-thirds of the nation's gross domestic product.""

The 15-year fixed-rate mirrored last week's average of 3.69 percent (0.7 point). Last year at this time, the 15-year fixed-rate mortgage average was 4.04 percent.

While the 30-year and 15-year fixed rate mortgages remained virtually the same, the 5-year adjustable-rate mortgage (ARM) dropped from an average of 3.25 percent last week to 3.22 percent (0.6 point) this week, hitting a new record low. The previous record low, set November 11, 2010, was 3.25 percent.

The 1-year Treasury-indexed ARM also fell this week from 2.99 percent last week to 2.97 percent (0.6 point) this week. The rate is also lower than the average from last year at this time, which was 3.80 percent.

Meanwhile, Nothaft says, ""there were some signs of improvement in the housing market.""

In April, the S&P/Case-Shiller 20-city composite home price index rose 0.7 percent, representing the first monthly increase since July 2010. However, much of the improvement reflected the seasonal increase in homebuying over the spring-summer period, he explained.

Nothaft also pointed to the fact that pending existing home sales rebounded in May, exhibiting the largest monthly increase since November 2010.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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