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Mortgage interest rates plumb new depths

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Continued turmoil in the financial markets, stubbornly high unemployment and economic uncertainty keep pushing mortgage interest rates to new depths, according to Freddie Mac. The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed mortgage fell to 4.12% for the week ending Thursday from 4.22% a week earlier. The interest rate for a traditional mortgage is now at the lowest level in five decades. The average rate for a 15-year, fixed mortgage decreased to 3.33% from 3.39% the prior week, according to the Freddie Mac survey. "Market concerns over Eurozone sovereign debt default and a weak U.S. for August placed downward pressure on Treasury bond yields and allowed fixed mortgage rates to hit new lows this week," said Frank Nothaft, Freddie Mac chief economist. "The economy added no new jobs last month and was the weakest reading since September 2010. Meanwhile, the unemployment rate remained at 9.1%, marking its 31st consecutive month of being above 8%, the longest such stretch in 70 years," he said. In December, Nothaft said he expects rates on a 30-year, fixed mortgage to remain below 5% throughout 2011, as the economic recovery accelerates. Mortgage interest rates are considerably lower than the year ago, when the 30-year averaged 4.35% and the average 15-year, fixed mortgage was 3.83%. Freddie Mac said the average five-year, Treasury-indexed adjustable-rate mortgage stayed flat with the prior week at 2.96% and is down from 3.56% a year ago. The average rate for a one-year, ARM fell to a new low at 2.84% from 2.89% a week ago. The rate is down from 3.46% at this time last year. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw

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