Freddie: Rates Low Enough to Encourage Refis

The average rate tracked by Freddie Mac for a 30-year fixed rate mortgage during the week ended March 12 has dropped to 5.03% from 5.15% the previous week, giving many existing homeowners with outstanding loans what Freddie chief economist Frank Nothaft calls "a strong incentive to try and refinance." He cited Bureau of Economic Analysis statistics that show the effective mortgage rates for loans outstanding in the fourth quarter of 2008 was roughly 6.2% "or almost 1.2 percentage points above this week's average rate" and also noted that the 30-year FRM rate "remains very close to January's all-time recorded low of 4.96%." Mr. Nothaft said rates "had room to ease this week following news of a weaker jobs market." The average 15-year FRM rate fell to 4.64% from 4.72% a week ago and from 5.60% a year ago, the average rate on a five-year Treasury-indexed hybrid adjustable-rate mortgage dropped to 4.99% from 5.08% the previous week and from 5.58% last year, and the average one-year Treasury-indexed ARM rate declined to 4.80% from 4.86% a week ago and 5.14% a year ago. Average points were as follows: 0.7 for 30- and 15-year FRMs, 0.6 for five-year Treasury-indexed hybrids, and 0.5 for one-year Treasury indexed ARMs.