30-Year Rates Dip; Home Prices Inch Higher

Rates on 30-year mortgages fell slightly from last week but remained just ahead of record lows posted this month, Freddie Mac said Thursday.

Average rates on 30-year, fixed-rate mortgages dipped to 4.8 percent from 4.82 percent last week, Freddie Mac said. Last year at this time, the average rate on a 30-year mortgage was 6.03 percent, and it has been less than 5 percent for six consecutive weeks.

The all-time low of 4.78 percent was recorded the week of April 2. Freddie Mac's survey dates to 1971.

Low mortgage rates have led to more refinancing since rates first fell sharply in the winter. Rates slid again after the Federal Reserve said last month that it would buy $1.2 trillion of mortgage-backed securities and $300 billion of long-term government debt, which traditionally influences rates on 30-year home loans.

U.S. home prices rose 0.7 percent in February from January, the Federal Housing Finance Agency said this week, though the agency's monthly house price index is down 9.5 percent from its April 2007 peak.

"The housing market is showing further signs of possible improvement," Frank E. Nothaft, Freddie Mac's chief economist, said in a statement.

U.S. home prices were down 6.5 percent in February compared with a year earlier, the second-smallest drop in six months and a sign that low mortgage rates may be spurring demand.

Fannie Mae refinanced $77 billion in loans last month, nearly double February's level and the busiest month for such activity since 2003.

The Mortgage Bankers Association's index of applications to buy a home or refinance a loan increased 5.3 percent, to 1172.2 in the week ended April 17, from 1113.2 the week before. The group's purchase index dropped 4.2 percent, and the refinancing gauge rose 7.7 percent.

Freddie Mac also said Thursday that the average rate on a 15-year, fixed-rate mortgage was 4.48 percent this week, unchanged from last week.

Rates on five-year, adjustable-rate mortgages fell to 4.85 percent from 4.88 percent last week -- the lowest since Freddie Mac began tracking them in January 2005.

Average rates on one-year, adjustable-rate mortgages fell to 4.82 percent from 4.91 percent last week.

Borrowers can reduce their interest rate by paying a fee called a point. Each point costs 1 percent of the mortgage amount. The average fee was 0.7 point last week for 30-year and 15-year, fixed-rate mortgages. Fees averaged 0.6 point for five-year, adjustable rate mortgages, and one-year adjustable mortgages had an average fee of 0.4 point.

Freddie Mac collects mortgage rates from lenders around the country. Rates can fluctuate significantly.