30-year-loan rates match record low

Average rates for 30-year, fixed-rate mortgages fell this week, matching a record low set last spring. Rates are more than a full percentage point below what they were a year ago, Freddie Mac said Wednesday.

Rates for those 30-year mortgages averaged 4.78 percent this week, down from 4.83 percent last week and equaling the low mark reached the week of April 30. Freddie Mac has been tracking rates on 30-year, fixed-rate mortgages since 1971.

Last year at this time, the mortgages averaged 5.97 percent.

The average rate on a 15-year fixed-rate mortgage fell to 4.29 percent from 4.32 percent, according to Freddie Mac. The 15-year rate hasn't been this low since Freddie Mac started tracking it in 1991.

Rates on five-year, adjustable-rate mortgages averaged 4.18 percent, down from last week's 4.25 percent. Rates on one-year, adjustable-rate mortgages were 4.35 percent for the second consecutive week.

Interest rates began dropping last November, when the Federal Reserve began spending $1.25 trillion to buy mortgage-backed securities in an effort to lower rates, loosen credit availability and bolster the housing market. Rates for 30-year fixed mortgages are now 0.8 percentage points below this year's peak, reached in June. "When mortgage rates track down to well below 5 percent, that is a key threshold that generates a lot of interest in terms of new purchases and refinancing," said Brian Bethune, chief financial economist at IHS Global Insight. "The market is gradually pulling out of this huge hole, this huge recession it was in."

Low mortgage costs and a tax credit for first-time home buyers are helping increase demand for property, putting October's existing-home sales on pace to hit 6.1 million this year. A falling number of unsold homes is also beginning to stabilize prices. The S&P/Case-Shiller home-price index rose 0.27 percent in September from August, the fourth consecutive gain.