US 30-year mortgage rates down slightly in week

Average interest rates on U.S. 30-year fixed rate mortgages dipped slightly this week, according to a weekly survey issued by mortgage finance company Freddie Mac on Thursday.

Rates on 30-year mortgages inched downward to an average of 6.26 percent from 6.28 percent the week before, while rates on 15-year mortgages remained unchanged at 5.81 percent, Freddie Mac said.

"Mortgage rates are in a holding pattern at the moment as financial markets try to discern where inflation and growth in the economy are headed," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

"Until the market decides these issues, mortgage rates should stay within a relatively narrow band," he said.

A year ago rates averaged 5.81 percent on 30-year mortgages and 5.23 percent on 15-year mortgages.

On Monday the National Association of Realtors reported that sales of existing U.S. homes fell by 2.7 percent in October, with the inventory of unsold houses rising to the highest level in nearly two decades.

Also, on Tuesday, the Commerce Department said sales of new U.S. homes climbed by 13 percent in October, setting a record annual rate of 1.424 million units.

Rates on the one-year Adjustable Rate Mortgage (ARM) rose slightly this week to an average of 5.16 percent from 5.14 percent.

Lenders charged an average of 0.5 percent in fees and points on 30- and 15-year mortgages, both down from last week's 0.6 percent. They charged 0.8 on the one-year ARM, up from 0.7 percent.

The hybrid "5/1" ARM, set at a fixed rate for five years, then adjustable each year following, averaged 5.76 percent, up slightly from 5.75 percent a week ago, Freddie Mac said.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.