Mortgage rates slip to 5.94%

Rates on 30-year fixed mortgages were down for the first time in three weeks, as loan applications grew slightly.

By Lara Moscrip, CNNMoney.com contributing writer
October 9, 2008: 10:58 AM ET

NEW YORK (CNNMoney.com) -- Rates on 30-year mortgages fell from last week, while loan applications grew slightly in the face of turbulence in the banking and finance sectors.

Mortgage finance firm Freddie Mac (FRE, Fortune 500) reported Thursday that 30-year fixed-rate mortgages averaged 5.94% this week. That's down from 6.10% last week and well below 6.40%, where the rate stood a year ago.

"Longer-term mortgage rates fell for the first time in three weeks, roughly following bond market yields," said Frank Nothaft, Freddie Mac vice president and chief economist.

Meanwhile, mortgage applications for home purchases and refinancing grew slightly over the week ending Oct. 3, reversing a two-week decline, according to data from the Mortgage Bankers Association.

Rates on 15-year fixed-rate mortgages fell to 5.63%, from 5.78% last week. A year ago, that rate was 6.06%

The five-year adjustable-rate mortgage fell to 5.90%, down from last week at 6.00%. A year ago, the rate was 6.12%.

The rate on a one-year adjustable-rate mortgage increased slightly to 5.15%, compared to 5.12% last week. At this time last year, the rate was 5.73%.

In September, the government took control of the mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac with a rescue plan that could inject $200 billion into them to keep them afloat.