30-year mortgage fall, remain at 2 year low

WASHINGTON (Reuters) - 30-year mortgages fell for the third consecutive week, hitting another two year low, mortgage giant Freddie Mac said on Thursday.

U.S. 30-year mortgage rates dropped to an average of 5.96 percent this week, their lowest level since the week ended September 29, 2005, when they averaged 5.91 percent.

Fifteen-year mortgage rates also declined to their lowest level in more than two years, falling to 5.65 percent from 5.73 percent last week. It was the lowest rate since the week ended October 13, 2005, when the 15-year averaged 5.62 percent.

One-year adjustable rate mortgages rose slightly to an average of 5.46 percent from 5.43 percent in the prior week.

Freddie Mac said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.75 percent, down from 5.86 percent a week ago.

A year ago, 30-year mortgages averaged 6.11 percent, 15-year mortgages averaged 5.84 percent and the one-year ARM averaged 5.43 percent. The 5/1 ARM averaged 5.92 percent.

"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

Citing higher U.S. non-farm productivity and lower labor costs, Nothaft said, "These combined factors will likely diminish upward pressures on mortgage rates over the next few months."

Lenders charged an average of 0.4 percent in fees and points on 30-year mortgages, down from 0.5 in the prior week.

Fees and points charged on 15-year mortgages and the 5/1 ARM averaged 0.5 percent, both unchanged from last week.

One-year ARM mortgages fell to an average of 0.6 percent in fees and points, down from 0.7 percent a week earlier.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.

(Reporting by Ayesha Rascoe; Editing by Dan Grebler)