Mortgage Rates Hit 20-Month Low

Mortgage rates fell this week to the lowest level in 20 months, as a side effect of the seesawing stock market. The decline in the average rate on 30-year fixed-rate mortgages to 7.21% from 7.35% a week earlier brought the average to its lowest level since the week ended Feb. 15, 1996, said Freddie Mac, the mortgage company. It was the biggest drop in six weeks. Before stock market turmoil spread around the world from Southeast Asia, economists were predicting mortgage rates would drift up this year. Fifteen-year mortgages, a popular option for refinancing, averaged 6.76% this week, down from 6.90% and also the lowest since February 1996. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.46%, down from 5.55% and the lowest in eight months. The rates do not include add-on fees known as points.