Real Estate Notes
Mortgage rates for 30-year loans fall to lowest level on record Â again
Mortgage rates for 30-year loans fell to the lowest level on record for the third straight week, reducing borrowing costs for home buyers as unemployment and foreclosures stifle demand.
The average rate declined to 4.57 percent this week, the lowest since Freddie Mac began compiling the data in 1971, the mortgage finance company said. It was 4.58 percent last week. The last time rates were lower was in the 1950s, when most long-term home loans lasted just 20 or 25 years.
Rates for 15-year loans rose to 4.07 percent from 4.04 percent.
Rates on five-year adjustable-rate mortgages averaged 3.75 percent, down from 3.79 percent a week earlier. That was also the lowest on Freddie Mac's records dating from January 2005.
Rates on one-year adjustable-rate mortgages fell to 3.75 percent from 3.80 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for all types of loans in Freddie Mac's survey averaged 0.7 of a point.
Borrowing costs have tumbled for three months amid strong investor demand for bonds including mortgage-backed securities. Lower rates have failed to lift housing sales, which sank after a tax credit for buyers expired.
Overall mortgage applications increased 6.7 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. But they still remain 35 percent below last year's levels. Loan applications to buy a home declined 2 percent, but applications for refinancing rose 9.2 percent.
Rates could go lower and still not budge the housing market, analysts say. That's because a person without a job can't afford a home and a person worried about losing a job is unlikely to purchase, said Greg McBride, senior financial analyst with Bankrate.com. "And if an $8,000 tax credit didn't get buyers to take the plunge, saving $50 a month on a mortgage payment probably won't either," he said.
George Mokrzan, senior economist at Huntington National Bank in Ohio, said: "The problem right now is there are some other headwinds going on. The labor reports have been on the soft side the last couple of months."
-- From news services