Newspaper article THE JOURNAL RECORD

Mortgage Rates Fall

Newspaper article THE JOURNAL RECORD

Mortgage Rates Fall

Article excerpt

McLEAN, Va. (Bloomberg) -- The benchmark U.S. mortgage rate fell this week to its lowest level in five months, Freddie Mac reported Thursday.

The average rate on a 30-year fixed-rate mortgage dropped to 6.94 percent in the week that ends today, from the previous week's 7.04 percent, according to a weekly survey of mortgage rates from Freddie Mac.

This week's level was the lowest since the week ended Jan. 16, when the 30-year mortgage rate was 6.89 percent, according to Freddie Mac. The highest level so far this year for mortgage rates was 7.22 percent, reached during the week ended May 1. Mortgage rates fell as the problems in the economies of Asian nations continued last week, and the weakness of the yen increased the risk that the Asian crisis would deepen. A prolonged recession in Asia would, in turn, depress U.S. exports to a vital export market. "Interest rates were primarily influenced by the Asian economic problem and most significantly by the Japanese economic problems," said Robert Van Order, chief economist at Freddie Mac. Van Order said rates may rise next week but should remain around 7 percent. Thursday's report also showed that the average rate on an adjustable mortgage was 5.68 percent, down from 5.71 percent; while 15-year mortgage rates fell to 6.62 percent, from 6.71 percent. Low rates have been a big boost for the housing market. Earlier this week, a survey by the National Association of Home Builders showed industry expectations about the U.S. housing market rose to a record level this month as mortgage rates remained low. The trade group's housing market index increased to 71 in June from the previous month's 68. This month's reading brings the index to its highest level in the report's 13-year history, the organization said. A reading above 50 suggests that more survey participants are seeing "good" economic conditions than "poor" ones for home sales. Commerce Department figures released this week showed housing starts fell 0.7 percent last month to 1.530 million units at an annual rate. In April, housing starts fell to a revised 1. …

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