Rates for 30-year mortgages drop for first time in five weeks
Mortgage rates for 30-year loans declined for the first time in five weeks, reducing borrowing costs from a 10-month high.
The average rate for 30-year fixed loans fell to 5 percent this week from 5.05 percent, according to Freddie Mac. The average 15-year rate was 4.27 percent, down from 4.29 percent last week, the mortgage- finance company said.
The average rate on a five-year adjustable-rate mortgage fell to 3.87 percent from 3.92 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on one-year adjustable-rate home loans edged up to 3.39 percent from 3.35 percent.
The decline in long-term rates follows a surge in interest rates that sent demand for mortgages to a two-year low. A lasting housing recovery has been held back by mounting foreclosures and 21 straight months of unemployment of at least 9 percent.
"The housing market is struggling to regain traction despite still historically low rates," Frank Nothaft, vice president and chief economist for Freddie Mac, said.
Long-term mortgage rates tend to track the yield on the 10-year Treasury note, which slipped this week after the White House unveiled its $3.7 trillion budget request for the next fiscal year. The yield had spiked last week on fears of higher inflation.
The Mortgage Bankers Association's index of loan applications decreased 9.5 percent in the week ended Feb. 11 to the lowest point since November 2008, dragged down by a plunge in refinancing.
The group's refinancing measure dropped 11 percent, and its gauge of purchases fell 5.9 percent. The share of mortgage applicants seeking to refinance slid to 64 percent, the lowest level since May, from 66.6 percent the previous week.
-From news services