Mortgage rates last week fell to the lowest level since April, as investor fears of inflation subsided.

Lenders were offering 30-year fixed-rate home loans at an average of 7.38%, down from 7.48% the previous week, according to the Federal Home Loan Mortgage Corp.

The new average matched the level of April 23, the low point of this year. Previously, rates hadn't been that low since August 1972.

Inflation |in Check'

Freddie Mac economist Robert Van Order said the rates fell because fears of increased inflation turned out to be unfounded.

"There were concerns that inflation was on the rise, but last week's producer price index and this week's consumer price index show that prices for goods and services are in check," Mr. Van Order said.

Another benefit of flat inflation rates is that the federal govemment is less likely to tighten the supply of money, he said. In such a tightening, interest rates would rise and pufl mortgage rates up.

The cuffent 7.38% average is a mere six basis points above the lowest level Freddie Mac has ever recorded. That was on April 30, 1971, when the average stood at 7.29%.

Mr. Van Order predicted that rates would hover in the range of 7.5% to 7.75% for the rest of the year.

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