Home loan rates decline again as inflation fears abate

August 5, 2010 LA Times, E. Scott Reckard

Record low mortgage rates are still declining, according to Freddie Mac, which said lenders were offering 30-year fixed loans at less than 4.5% this week and 15-year loans at less than 4%.

Freddie’s chief economist, Frank Nothaft, noted that the rate of growth in the gross domestic product had been revised downward, reducing fears about inflation and as a result decreasing pressures on long-term interest rates.

Reporting a seventh straight week of declines, Freddie Mac said the 30-year rate averaged 4.49% for the week ending Thursday, down from 4.54% last week and 5.22% a year earlier.

On home loans with rates fixed for 15 years, the interest rate averaged 3.95%, down from an even 4% a week earlier and 4.63% a year earlier.

The interest rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage — that’s the one that turns variable after five years at a fixed rate — averaged 3.63% this week, down from 3.76% a week earlier and 4.73% a year ago.

Freddie Mac, the giant government-sponsored buyer of home loans, asks lenders about the rates they are offering on mortgages up to $417,000 to borrowers who are good credit risks. The borrowers would have paid 0.7% of the loan balance to the lenders in upfront fees and points, Freddie said.

Solid borrowers who shop around often find slightly better rates than those published in the survey.

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