Mortgage Rates Tumble

McLEAN, Va. - (09/02/05) -- Long-term mortgage rates declinedthis week to the lowest level in six weeks, as energy prices nearrecord highs made investors nervous about slowing economic growth,Freddie Mac said Thursday. The average for the benchmark 30-yearloan slipped to 5.71%, from 5.77% last week; while the average forthe 15-year, fixed-rate mortgage dipped to 5.32%, from 5.35%. ARMrates were mixed, with the average for the one-year ARM dropping to4.48%, from 4.56%, but the average for the five-year ARM holdingsteady at 5.30%. "Market jitters about high energy costs and thespill over into other sectors of the economy have led to a declinein bond yields, which typically means lower mortgage rates," saidFrank Nothaft, chief economist at Freddie Mac. "And speculationthat the Federal Reserve may soon take a break in raisingshort-term rates reduces upward pressure on long- and short-terminterest rates. As if all that wasn't enough, the devastationcaused by Hurricane Katrina and the echo effects on future energyprices in the U.S. may mean that mortgages rates will fall evenfurther in the coming days ahead."