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Mortgage Rates Retreat as Housing Market Slows

On Fridays we focus on your money. Today we begin with mortgage rates. They've been quietly slipping over the past two months. New figures out this week from Freddie Mac show the average rate on a 30-year fixed loan to be 6.4 percent, down from 6.8 percent just a month ago. NPR's Chris Arnold reports.

CHRIS ARNOLD reporting:

The monthly payment on a $300 thousand, 30-year fixed mortgage is now about $80 cheaper than it was earlier this summer. In part, that's a sign that banks think inflation is under control. Another factor is the weakening housing market. Fewer people are looking for mortgages.

Holden Lewis with BankRate.com says that's putting the squeeze on lenders to lower rates.

Mr. HOLDEN LEWIS (BankRate.com): A lot of mortgage people are being laid off, and there's a lot of mortgage companies out there that are trying not to lay off employees. And so people are offering really good mortgage deals just to keep the money coming in, just to keep the business flowing.

ARNOLD: But people with adjustable-rate mortgages could still see their payments rise sharply. So Lewis says it's a good time for them to consider refinancing into a fixed-rate mortgage.

Chris Arnold, NPR News, Boston. Transcript provided by NPR, Copyright NPR.

NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.