The average rate on 30-year fixed-rate mortgages slid to 7.28% for the week ended Sept. 26, down from 7.38% the previous week, Freddie Mac reported. A year earlier, the rate was 8.16%.
The rate is the lowest it has been since the week of Feb. 16, 1996, when it averaged 6.94%.
"Interest rates are still feeling the effects of the information contained in the most recent consumer price index, showing inflation to be well under control,"said Robert Van Order, chief economist at Freddie Mac. "With interest rates at a 19-month low, we should see a strong fall housing market."
The rate for one-year Treasury-indexed adjustable-rate mortgages averaged 5.51%, down slightly from the previous week when the average was 5.53%. A year ago, the one-year ARM was 5.82%. This is the lowest the one- year ARM has been since the week ending Aug. 1, when it averaged 5.49%.
The average for 15-year fixed-rate mortgages was 6.86%, also falling from last week's average of 6.94%. This is the lowest the 15-year fixed- rate has been since the week ending Feb. 23, 1996, when it averaged 6.77%. A year earlier the 15-year interest rate was 7.68%.