Homeowners pick fixed-rate, shorter terms

The majority of new contracts were set with 30-year terms, while many of those who refinanced favored 15-year contracts, Freddie Mac said.

Regardless, when refinancing their mortgages, fixed-rates were the most popular by far.

"Average interest rates on 30-year and 15-year fixed-rate mortgage loans remained extraordinarily low during the first quarter, averaging 5 percent and 4.38 percent, respectively," said Frank Nothaft, Freddie Mac vice president and chief economist.

"With fixed-rate interest rates near a generational low and initial rates on hybrid adjustable rate mortgages close to fixed-rate levels, large numbers of homeowners have chosen fixed-rate loans for refinance," he said.

With homeowners choosing "the comfort that comes with constant monthly principal and interest payments," a quarter of homeowners who refinanced dropped their contracts from 30-year to 15- or 20-year contracts, Freddie Mac said.

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