Mortgage rates hit new low
30-year loan rates drop below 6%
Republic News Services
Sept. 27, 2002 02:38 PM
Rates on 30-year mortgages dropped this week to another low, further fueling the refinancing boom and
helping boost the national economy.
In a nationwide survey released Thursday, Freddie Mac, the mortgage company, reported that the average
interest rate on a 30-year fixed-rate mortgage fell to 5.99 percent this week, the lowest level since Freddie
Mac began tracking them in 1971.
This week's rate surpassed the previous low of 6.05 percent set last week and marked the fifth time this year
that 30-year rates hit record lows.
Mortgage rates have been falling amid a spotty economic recovery and a turbulent stock market that has
sent investors to the bond market, helping to push long-term rates down.
Low mortgage rates are feeding a surge in mortgage refinancing. Savings or extra cash coming out of
refinancing deals is helping to support consumer spending, including home buying, amid uncertain
economic times and eroding consumer confidence.
Homeowners took out about $50 billion worth of equity in the first six months of the year through
refinancing, according to a recent report from Freddie Mac.
The impact from lower rates is being felt nationwide. In the mountain region, which includes Arizona, Bank
One applications, for example, have jumped 50 to 60 percent in the past two months, said Ernie Montoya,
senior vice president and western region sales manager for retail lending.
More and more Americans are looking to take advantage of the declining rates.
Low mortgage rates will "keep the housing market at a good solid pace," said Lynn Reaser, chief economist
at Banc of America Capital Management in St. Louis.
An index measuring applications for U.S. mortgages rose to the second-highest level in more than a decade
of record keeping. The Mortgage Bankers Association of America's mortgage applications index showed a
4.8 percent increase, to 1183.8. Three-quarters of