Mortgage rates edge down

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Fixed 30-year mortgage interests rates edged down slightly but remained above 5% for the fourth straight week, according to the latest report from Freddie Mac.

The government-controlled buyer and guarantor of home loans said today that 30-year fixed mortgages were averaging 5.06% this week with 0.7% of the loan amount paid upfront in lender fees. That was down from 5.09% last week and up from 4.96% a year ago.

The average interest rate for a 15-year fixed mortgage, a popular option for people refinancing loans to pay them off sooner, averaged 4.45% this week with 0.6% in lender fees, down from 4.50% last week and down from 4.65% a year ago.

The typical rate on a 30-year fixed mortgage fell below 5% in November and stayed there for six weeks, triggering a boom in homeowners refinancing their mortgages. Refinancings continue to outnumber home-purchase loans by a 3 to 1 margin, Freddie Mac chief economist Frank Nothaft noted.

Predicting that interest rates would rise later this year, the Mortgage Bankers Assn. said in a report this week that it expects total mortgage originations to decline from $2.11 trillion in 2009 to $1.28 in 2010 as refinancing drops off.

-- E. Scott Reckard