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Daily Real Estate News  |  September 15, 2006  |   Mortgage Rates Drop Slightly Last Week
The national average rate on a 30-year, fixed-rate mortgage was 6.43 percent last week, down slightly from 6.47 percent the week before but up from 5.74 percent a year ago, according to Freddie Mac.

The average for the 15-year, fixed-rate mortgage was 6.11 percent, down from the previous week’s 6.16 percent but again higher than the 5.32 percent average for the same period last year.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.1 percent, down from 6.14 percent. A year ago, the five-year ARM averaged 5.26 percent.

The average rate on one-year ARMs was 5.6 percent last week, compared with 5.63 percent the previous week and 4.46 percent a year ago.

“Although 30-year mortgage rates are about three-fourths of a percentage point higher than they were last year, it's good to keep in mind that rates have dropped from the high of 6.8 percent reached just eight weeks ago,” says Frank Nothaft, Freddie Mac vice president and chief economist. “And with short-term interest rate increases seemingly on hold, for a while at least, interest rates overall should not experience any big shifts in either direction.”

“The risk to our forecast of relatively stable mortgage rates is that inflation will unexpectedly heat up, causing bond markets to raise their expectations that the Fed will intervene by raising short-term rates,” Nothaft adds. “In that case, mortgage rates will again start to rise.”

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