30-Year Mortgage Rates Fall to 2-Year Low

Concerns over a severe housing downturn and prolonged credit crisis could shake consumer confidence and hurt the economy contributed to a drop in mortgage rates this week, according to Freddie Mac. Interest on 30-year fixed loans sank to 5.96 percent from 6.10 percent last week, landing at the lowest point seen since September 2005.

Borrowing costs on 15-year fixed products fell to 5.65 percent from 5.73 percent over the week and five-year adjustable-rate mortgages were down to 5.75 percent from 5.86 percent, but one-year ARMs bucked the southward trend by bumping up to 5.46 percent from 5.43 percent.

"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," said Freddie Mac chief economist Frank Nothaft.