Mortgage Rate Down 3rd Week

Mortgage rates fell for the 3rd week in a row as the Federal Reserve paused in its interest-hike campaign. We expect the rate to rise soon in anticipation of inflationary fear originating from higher oil price and unrest in middle east. The unveiling of the failed terrorist plot in Britain today may also contribute to price hike in travel expenditure originating from tighter security measures. Although crude price dropped today, we all can guess that this is just temporary. Even though the effect of higher oil price had been minimal, sooner or later we would painfully observe its effect in prices of all kinds of goods. After all those arrive in stores by trucks.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.55% in the week that ended today -- down from its 6.63% average last week. It is a quarter of a percentage point below its most recent high of 6.8% reached on July 20. At this time last year, the loan averaged 5.89%. The 15-year fixed rate averaged at 6.20% this week, again a fall from last week's 6.27%. At this time last year this rate was 5.47%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged at 6.21% decreasing from last week's 6.27%. This rate averaged 5.40% a year ago. The 1-year Treasury-indexed ARMs remained unchanged at last week's average of 5.69%. At this time in 2005, the 1-year ARM averaged only 4.57%.