Mortgage Rates Drop to 22-Month Low

Mortgage interest rates fell to a 22-month low this week in the sharpest drop since the Asian currency crisis began roiling markets in late October. The average rate on 30-year fixed-rate mortgages was 7.07%, down from 7.17%, the Federal Home Loan Mortgage Co. said. Mortgage rates have been keying off the U.S. Treasury securities market, where investors fleeing Asian turmoil have been snapping up bonds. This week’s rate was the lowest since Feb. 15, 1996. It marked the largest drop in seven weeks. Mortgage loan applications last week were up 36% from the corresponding time last year, the Mortgage Bankers Assn. of America said. Fifteen-year mortgages averaged 6.65% this week, also the lowest in 22 months and down from 6.72%, Freddie Mac said. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.51%, down from 5.52%. The rates do not include points.