U.S. 30-year mortgage rates hit two-year low

WASHINGTON, Nov 29 (Reuters) - U.S. 30-year mortgages hit a two-year low this week, continuing their steady descent, mortgage giant Freddie Mac said on Thursday.

U.S. 30-year mortgage rates dropped to an average of 6.10 percent this week, their lowest level since the week ended Oct. 13, 2005, when they averaged 6.03 percent.

Fifteen-year mortgage rates declined to their lowest level in more than a year, falling to 5.73 percent from 5.83 percent last week. It was the lowest rate since the week ended Jan. 26, 2006, when the 15-year averaged 5.70 percent.

One-year adjustable rate mortgages rose slightly to an average of 5.43 percent from 5.42 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 5.86 percent, down from 5.88 percent a week ago.

A year ago, 30-year mortgages averaged 6.14 percent, 15-year mortgages averaged 5.87 percent and the one-year ARM averaged 5.46 percent. The 5/1 ARM averaged 5.95 percent.

"Interest rates for U.S. Treasury securities have been drifting lower this month over market concerns that the housing slump and stress in the credit markets could slow future economic growth," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

Although sales of new single-family U.S. homes rose 1.7 percent in October to an annual rate of 728,000 units, the median sales price for a new home fell 8.6 percent to $217,800, the Commerce Department reported on Thursday.

The National Association of Realtors said on Wednesday that the pace of U.S. existing-home sales fell 1.2 percent in October to a record low 4.97 million-unit pace. The median existing-home price also declined 5.1 percent from a year earlier in October to $207,800.

Citing the falling home prices and growing inventory of homes for sale, Nothaft said, "The overall picture does, indeed, appear glum with no immediate relief in sight."

Lenders charged an average of 0.5 percent in fees and points on 30- and 15-year mortgages and the 5/1 ARM, all unchanged from last week.

Fees and points charged on one-year ARM mortgages averaged 0.7 percent, up from 0.6 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 Leslie Adler)