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Shorter-term mortgage rates fall

October 25, 2010 - Relocating families encountered slightly higher mortgage rates this week for longer-term loans, though interest rates on adjustable-rate mortgages fell again.

Freddie Mac reported higher average interest rates on 30-year fixed-rate mortgages - which increased from 4.19 percent to 4.21 percent for the week ending October 21 - as well as 15-year mortgages, which saw rates climb from 3.62 percent to 3.64 percent. On the other hand, a buyer moving into a new home might fetch a lower average rate on an adjustable-rate mortgages, as five-year ARMs dropped from 3.47 percent to 3.45 percent, and one-year ARMs declined from 3.43 percent to 3.30 percent.

"Mixed inflation signals kept fixed mortgage rates at bay this week," said Frank Nothaft, Freddie Mac's vice president and chief economist. "Rates on the traditional one-year and five-year hybrid ARMs eased to all-time record lows."

Rising rates on long-term fixed-rate mortgages may have diverted a number of homebuyers from seeking mortgages to finance their relocations to a new home. The Mortgage Bankers Association reported that total mortgage activity slid 10.5 percent for the week ending October 15.
 

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