WASHINGTON - Rates on 30-year mortgages dropped sharply this week, falling to the lowest level in five months, as the government's dramatic takeover of mortgage giants Fannie Mae and Freddie Mac had the desired effect of lowering mortgage rates.
Freddie Mac reported Thursday that its nationwide survey found that 30-year, fixed-rate mortgages dipped to 5.93 percent this week, down from 6.35 percent last week.
The sharp decline pushed the 30-year rate below 6 percent for the first time since late May and marked the lowest level for this rate since an average of 5.88 percent the week of April 17.
Private economists had predicted that the government's move on Sunday to take control of Fannie Mae and Freddie Mac would result in lower mortgage rates for consumers because it removed a huge uncertainty about the future of the two firms, which own or guarantee half of the nation's mortgages.
Mark Zandi, chief economist at Moody's Economy.com, said Thursday that he believed rates could keep falling and perhaps drop to around 5.5 percent for the 30-year mortgage, which would give a further boost to the battered housing market.
"This is the most significant positive benefit of the government takeover of Fannie and Freddie," Zandi said. "I think it is important that rates have fallen below the key 6 percent benchmark, and, hopefully, rates will move lower in coming weeks."
The 30-year mortgage hit a 2008 high of 6.63 percent July 24 and had been above 6 percent since late May.
The Freddie Mac survey showed that other mortgage rates declined this week, although one-year rates bucked the downward trend. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 5.54 percent, down from 5.90 percent last week.
