Mortgage Rates Lowest Since May

Washington, DC, Aug. 21, 2009--Interest rates on mortgages hit their lowest levels in months, with the 30-year fixed-rate mortgage averaging 5.12% this week, Freddie Mac reported on Thursday.

The 30-year fixed-rate mortgage averaged 5.29% last week; it averaged 6.47% a year ago, according to Freddie Mac's weekly survey of conforming mortgage rates.

Fifteen-year fixed-rate mortgages averaged 4.56% for the week ending Aug. 20, down from 4.68% last week and 6% a year ago.

"U.S. Treasury bond yields fell nearly a quarter of a percentage point over the week, and other long-term yields followed suit," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release.

"Interest rates on 30-year and 15-year fixed-rate mortgages fell to the lowest level since the end of May, while initial rates on 5/1 hybrid ARMs declined to levels not seen since January 2005."

The low mortgage rates are helping reinforce the housing market, he added.

New construction on one-family homes rose for the fifth consecutive month in July to an annualized pace of almost 500,000 homes, the most since October 2008.