Mortgage Rates Drop to 21-Month Low

Mortgage rates edged to a 21-month low as investors fleeing Asian turmoil continued to transfer money into the United States. The average rate on 30-year, fixed-rate mortgages fell to 7.17% from 7.18%, the Federal Home Loan Mortgage Corp. said. The decline brought the average to the lowest level since the week ended Feb. 15, 1996. Mortgage rates have been keying off the U.S. Treasury securities market, where investors have been snapping up bonds in a flight to quality. Thirty-year mortgage rates hit a peak for the year of 8.18% in early April, after the Federal Reserve Board last tightened monetary policy. Fifteen-year mortgages, a popular option for refinancing, averaged 6.73% this week, the same as last week. On one-year, adjustable-rate mortgages, lenders were asking an average initial rate of 5.47%, down from 5.48%. The rates do not include add-on fees known as points.