Rates on 30-year fixed-rate mortgages dropped substantially this week, falling under 6% for the first time since May, in response to the government takeover of Fannie Mae and Freddie Mac, according to Freddie's weekly survey.
For the week that ended Sept. 11, the national average for a 30-year fixed-rate loan dropped 42 basis points from the previous week and 38 basis points from a year earlier, to 5.93%, Freddie said Thursday. The rate has declined nearly 60 basis points over the past four weeks.
"Monthly principal and interest payment on a new $200,000 loan is over $76 lower than a month ago," Frank Nothaft, Freddie's chief economist, said in a press release. He expects the decline to spur home purchases and refinancings in the coming weeks.