Mortgage Rates: Low and Steady

Refinancing activity jumped up 18% last week, accounting for almost half of all mortgage applications. The low level of mortgage rates, which went down noticeably last week and remained steady this week, motivated many homeowners to move to refinance adjustable-rate mortgages before they reset to higher rates. Even though rates have fallen recently, housing activity continues to slow while new construction wanes, leading Fed Chairman Bernanke to expect that the national economic rate of growth will lose up to one full percentage point in the last half of 2006.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.30% in the week that ended today -- slightly down from its last week's average of 6.30%. At this time last year, the loan averaged 5.98%. The 15-year fixed rate averaged at 5.98% this week -- unchanged from last week. At this time last year this rate was 5.54%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged at 6.00% -- unchanged from last week. This rate averaged 5.48% a year ago. The 1-year Treasury-indexed ARMs have an average rate of 5.46%, slightly down from last week's rate of 5.47%. At this time in 2005, the 1-year ARM averaged only 4.77%.