Rate on 30-year mortgage falls to record 4.01 pct.

DEREK KRAVITZ, AP Real Estate Writer, Sep. 29, 2011

In this photo taken Sept. 27, 2011, a real estate sign is posted outside a newly listed home for sale, in Cincinnati. Fixed mortgage rates have fallen to historic new lows for a fourth straight week and are likely to fall further. Freddie Mac says the average on a 30-year fixed mortgage fell to 4.01 percent this week. That’s the lowest rate since 1951. (AP Photo/Al Behrman)

WASHINGTON (AP) — Fixed mortgage rates have fallen to historic new lows for a fourth straight week and are likely to fall further.

The average on a 30-year fixed mortgage fell to 4.01 percent this week, Freddie Mac said Thursday. That’s the lowest rate since the mortgage buyer began keeping records in 1971. The last time long-term rates were lower was in 1951, when most long-term home loans lasted just 20 or 25 years.

The average on a 15-year fixed mortgage, a popular refinancing option, ticked down to 3.28 percent. Economists say that’s the lowest rate ever for the loan.

Mortgage rates tend to track the yield on the 10-year Treasury note. Rates could fall further after the Federal Reserve announced last week that it would take further action to try to lower long-term rates.

But low rates have so far done little to boost home sales or refinancing. Many would-be buyers or homeowners don’t have enough cash or home equity to get a new loan.

High unemployment, scant wage gains and debt loads represent a heavy burden for many people. Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers.

This year is shaping up to be among the worst for sales of previously occupied homes in 14 years. Few are buying, even though the average rate on the 30-year fixed mortgage has fallen to around 4 percent.

Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points; one point equals 1 percent of the loan amount.

The average fee for the 30-year held steady at 0.7; for the 15-year, it rose to 0.7. The average fee for both the five-year and one-year adjustable-rate loans was unchanged at 0.6 point.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage was unchanged at 3.02 percent. The average for the one-year adjustable-rate mortgage ticked up to 2.83 percent.

Associated Press

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s