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Mortgage rates ease, Freddie Mac says: 30-year fixed averages 4.17%

Tight inventory restrains home sales as mortgage rates ease a bit
The 30-year mortgage gets a bit cheaper, reversing two weeks of increases, Freddie Mac says

Mortgage interest rates eased slightly this week, with lenders offering 30-year fixed-rate home loans to solid borrowers at an average of 4.17%, down from 4.2% a week earlier, Freddie Mac said.

The 15-year fixed-rate mortgage averaged 3.3%, down from 3.31%, Freddie said in its weekly survey, released Thursday. So-called hybrid adjustable loans, with the first five years at a fixed rate, had an average start rate of 3%, down from 3.05% a week ago.

The rates are only slightly higher than their recent low points in late May and early June. All the same, the increase has been accompanied by a large drop in the number of borrowers applying to refinance their home loans, according to the Mortgage Bankers Assn. 

Applications for mortgages to purchase homes also declined in the bankers association's latest survey, conducted last week.

“Some lenders continue to report that they have pre-approved borrowers who have been unable to find a property given the tight inventory in certain markets,” said Mike Fratantoni, chief economist for the home lenders trade group.

Freddie Mac’s long-running survey of mortgage rates asks lenders across the country about the terms they are offering solid borrowers with 20% down payments. The borrowers would pay about 0.5% of the loan amount in upfront fees and discount points to lenders.

Copyright © 2014, Los Angeles Times
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