ICS Magazine

30-, 15-Year Mortgage Rates Set New Lows

June 5, 2003
WASHINGTON (Reuters) - The average interest rate on U.S. 30-, 15- and one-year mortgages again dipped to new record lows in the week ending June 6, Freddie Mac said on Thursday.

Thirty-year mortgage rates fell to an average of 5.26 percent -- the lowest on Freddie Mac records dating back to 1971 -- from the previous record low of 5.31 percent set last week.

Fifteen-year mortgages dropped to 4.66 percent from 4.73, the lowest on Freddie Mac records going back to 1991.

One-year adjustable rate mortgages (ARM) also dipped to their lowest since Freddie Mac began tracing the rate in 1984. The ARM fell to an average of 3.59 percent compared with last week's 3.63 percent.

A year ago, 30-year mortgages stood at an average of 6.71 percent, 15-year mortgages at 6.18 percent and the ARM at 4.71 percent.

"Anticipation that the Federal Reserve may well cut rates at its next meeting, combined with further weakness in certain sectors of the economy, caused interest rates to fall once again," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

The world's largest economy has struggled to extirpate itself from the slump that had been exacerbated by the Sept. 11 attacks. Equity markets suffered further blows as major corruption scandals surfaced.

"However the economy is poised for growth in the near future and may begin a gentle upswing soon," Nothaft said, as data slowly pointed to a possible recovery.

The Labor Department is set to release May payroll data on Friday, an important report which could affect the Federal Reserve's decision on interest rates.