On the same day the National Association of Realtors said housing prices last month reached record highs, Freddie Mac reported another drop in mortgage rates.
The average rate on a 30-year fixed-rate mortgage fell to 5.57 percent this week, down from 5.63 percent last week. A year ago, 30-year mortgages were averaging 6.25 percent.
One-year adjustable-rate mortgages now average 4.23 percent, down from 4.25 percent last week.
"Given that mortgage rates aren''t expected to move too much in either direction any time soon, we fully expect the housing market will continue to thrive well into the foreseeable future," says Freddie Mac (NYSE: FRE) chief economist Frank Nothaft.
Sales of existing homes fell 0.7 percent in May, but it was still the second-highest level on record. The National Association of Realtors says the median price of a home rose to a record $207,000 in May.
The median price of a Greater Sacramento house climbed 24.8 percent from April 2004 to April 2005, hitting $369,720, according to California Association of Realtors tallies released in May. Buyers of a median-priced home here at this week''s average loan rate would pay about $1,692 per month in principal and interest, and more than $313,486 in interest over the life of the loan, if they put 20 percent down on a home on a 30-year mortgage. That means a homebuyer who waited to lock in their rates this week instead of last week saved $11 on their monthly payments and $4,014 over the life of the loan.
Jeff Clabaugh wrote this story for the Washington (D.C.) Business Journal, an affiliated newspaper
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