Housing Bill and Oil Prices Calm Mortgage Rates

Rates on 30-year mortgages, which shot up last week to the highest level in nearly a year, dropped slightly this week following passage of a housing rescue bill.

Freddie Mac reported Thursday that the nationwide average for 30-year mortgages dipped to 6.52 percent this week, down from 6.63 percent last week. While the new level was still the second highest this year, it was down slightly from last week when investors were concerned about financial troubles at Freddie Mac and Fannie Mae, which together hold or guarantee nearly half of the nation’s mortgages.

On Wednesday, President Bush signed into law a sweeping housing rescue plan, which had won final approval in Congress on Saturday. The measure aims to help up to 400,000 families avoid foreclosure by allowing them to refinance into more affordable mortgages.It also expands the assistance the federal government can provide Fannie and Freddie as a way of reassuring investors about the financial health of two mortgage titans.The fall of oil prices from their record highs also contributed to the downward pressure on mortgage rates, analysts said.“Mortgage rates moved lower this week as a drop in commodity prices eased market concerns over inflation pressures,” said Frank Nothaft, chief economist at Freddie Mac.