A Slight Drop in Interest Rates

NEW ECONOMIC NEWS ALLOWS MORTGAGE RATES TO SLIP FOR SECOND WEEK IN A ROW

Nationwide, 30-year fixed-rate mortgages averaged 6.18%, for the week ending March 1, down from last week's 6.22%.  Last year at this time, the 30-year FRM averaged 6.24%.  The average for the 15-year FRM this week is 5.92%, down from last week’s 5.97%.  One-year “T”ARMs were unchanged at 5.49% and five-year “T”ARMs averaged 5.93% down from last week’s 5.96%.

"Mortgage rates drifted lower this week largely on the basis of new economic information suggesting a slower economy and lower inflation," said Frank Nothaft , Freddie Mac vice president and chief economist. "Real GDP growth for the last quarter was revised downward to a 2.2 percent annualized rate, compared to the 3.5 percent initially estimated, while the accompanying price measure showed that core inflation was tamer than first reported, at a revised 1.9 percent annualized rate.  Home sales painted a mixed picture of January's activity. Continued weakness in the housing market was evidenced in January's new home sales, which fell by 17 percent from the previous month. Meanwhile, existing home sales rose unexpectedly in the same time period.  While the overall trend is unclear, the housing market is likely to continue on its rocky path during the first half of 2007."

• Freddie Mac

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