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Mortgages: Bond yields push mortgage rates lower: Freddie Mac (Market Watch)

This week's interest rates on mortgages drop, with the 30-year fixed-rate mortgage averaging 5.08%, according to Freddie Mac’s weekly survey of conforming mortgages. Freddie's chief economist says the latest data on real estate paint a favorable backdrop.

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Published: Sept 3, 2009 10:44 a.m

ET Share .st0{fill:transparent;} .st1{fill:#FFFFFF;} .st2{fill:transparent;enable-background:new ;} .st3{fill:transparent;enable-background:new ;} Bond yields push mortgage rates slightly lower, economist says window.videoDomain = ''; By AmyHoak Editor CHICAGO (MarketWatch) -- Interest rates on mortgages dropped this week, with the 30-year fixed-rate mortgage averaging 5.08%, according to Freddie Mac's weekly survey of conforming mortgages

The 30-year fixed-rate mortgage averaged 5.14% last week and 6.35% a year ago

Fifteen-year fixed-rate mortgages also dropped, averaging 4.54% for the week ending Sept

3, down from 4.58% last week

The mortgage averaged 5.9% a year ago

See Also Dos and Don'ts for Surviving the Longest Flight in the World × Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.59%, down from 4.67% last week and 5.97% a year ago

And one-year Treasury-indexed ARMs averaged 4.62%, down from 4.69% last week and from 5.15% a year ago

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 point and the 15-year fixed-rate mortgage, as well as the ARMs, required payment of an average 0.6 point

A point is 1% of the mortgage amount, charged as prepaid interest

"Bond yields pushed mortgage rates slightly lower this week," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release

"Low mortgage rates are helping to keep housing very affordable." Seven of the top eight most affordable months, as measured by the National Association of Realtors' Housing Affordability Index, have taken place during 2009, he said

The NAR's index dates back to 1971

"As a result, pending sales of existing homes rose for the sixth straight month in July, a trend not seen since the NAR began reporting data in 2001

Moreover, July's sales were the strongest since June 2007," Nothaft said

The NAR's pending home sales index rose 3.2% for the month and came in 12% higher than July 2008, the Washington-based trade group reported on Monday

Nothaft also said inflation "remains in check," as certain sectors of the economy are experiencing some improvement

In a separate release Wednesday, the Mortgage Bankers Association reported that mortgage applications were down a seasonally adjusted 2.2% for the week of Aug

28 compared with the prior week

See full story. Amy Hoak Amy Hoak is a MarketWatch editor and columnist based in Chicago

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