Mortgage rates lowest since late May

McLEAN, Va. -- Average rates on 30-year mortgages slid to the lowest levels since May this week, Freddie Mac said.

The average rate for a 30-year fixed-rate mortgage was 5.12%, down from 5.29% last week, Freddie Mac said. At this time last year, the average rate for 30-year fixed-rate mortgages was 6.47%.

Low mortgage rates can spur refinance activity and make home buying more attractive. The last time rates for 30-year mortgages were this low was the week of May 28, when they were 4.91%.

Rates on 30-year mortgages fell to a record low of 4.78% in April, but then rose to 5.6% after yields on long-term government debt, which are closely tied to mortgage rates, climbed.

Frank Nothaft, Freddie Mac's chief economist, said Treasury bond yields fell nearly a quarter of a percentage point over the week, bringing mortgage rates down.

The yield on the benchmark 10-year Treasury note rose Thursday to 3.48% from 3.46% late Wednesday.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

The average rate on a 15-year fixed-rate mortgage was 4.56%, down from 4.68% last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.57%, down from 4.75%. Rates on one-year, adjustable-rate mortgages fell to 4.69 from 4.72%.

The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages. Fees averaged 0.6 point for five-year adjustable-rate loans and 0.5 point for one-year adjustable-rate loans.