Freddie Mac: 30-Year Mortgage Rates Fall, Refinance Activity Increases

McLean, Va.–Refinancing activity picked up this week after mortgage rates fell due to disappointing economic results, according to government-sponsored loan buyer Freddie Mac.McLean, Va.-based Freddie Mac said the rate on a 30-year fixed-rate loan averaged 5.87 percent for the week ending Jan. 10, a decrease from last week’s 6.07 percent average, CNNMoney.com reports.The 30-year fixed-rate mortgage averaged 6.21 percent this week in 2007.An increase in unemployment–which hit a new two-year high of 5 percent last month–and slow growth in the service sector helped influence the drop, Freddie Mac Vice President and Chief Economist Frank Nothaft said Thursday.The National Association of Realtors’ recent report, indicating pending home sales had fallen in November and could slow in December, was another factor.”As a result, mortgage rates came down across the board, with 30-year fixed mortgage rates at their lowest level in more than two years,” Nothaft said. “Because average mortgage rates have come down more than a quarter of a percentage point in the past two weeks, there has been a pickup in refinance activity as borrowers take advantage of the lower rates.”