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Interest rate on 30-year mortgage dips to 4.8%

It's not the lowest interest rate in modern times, but 4.8 percent on a 30-year mortgage this week beat a lot of the weekly average rates recorded this year by Freddie Mac.

That lending rate was also lower than a year ago, when the rate was 5.07 percent, Freddie Mac said.

This was the first drop after rates inched higher for four straight weeks, the agency said.

"Low inflation is keeping mortgage rates at bay," said Frank Nothaft, vice president and chief economist at Freddie Mac.

Bad news drives rates down, and this week there's been pessimism over the housing market and a new report showing weak activity in construction starts for single-family homes.

There's been a lot of bad news on the Long Island front, from Nassau's financial straits to the Suffolk district attorney's investigation into the campaign finances of County Executive Steve Levy.

But local issues don't affect the rates, said Mike McHugh, president of the Empire State Mortgage Bankers Association and head of the Continental Home Loans in Melville. For example, the range of rates for places like Las Vegas, one of nation’s foreclosure epicenters, is pretty much the same as the one for Long Island.

But local issues do raise or lower sale prices and property values. "It's more macro," McHugh said of the drivers of rate changes. "Employment is still not strong, putting pressure on the economy. Even with employment, salaries have not increased."

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